New Delhi [India], July 28 : The active participation of state governments in rare earth exploration and processing can significantly contribute to regional economic development and India's self-sufficiency in critical mineral value chains, according to a recent research report by the State Bank of India (SBI).
The report highlighted that critical minerals, including rare earth elements, are essential to modern production due to their unique physical and chemical properties. These properties help reduce energy consumption, support miniaturization of devices, and provide thermal stability.
As a result, rare earth materials have become crucial to industries such as electronics, automotive, construction, and machinery.
It stated, "The active participation of state governments in encouraging rare earth exploration and processing can contribute to regional economic development and self-sufficiency in critical mineral value chains".
The analysis showed that India's total imports of rare earth elements and related compounds have averaged around USD 33 million annually over the last four years.
In the current financial year (FY25), rare earth imports stood at USD 31.9 million. Meanwhile, imports of rare earth magnets have been significantly higher, averaging USD 249 million per year over the same period.
In FY25, magnet imports rose to USD 291 million, the highest in the last four years.
Rare earth elements and magnets are directly absorbed by specific sectors.
According to the report, direct rare earth usage is concentrated in six industries, with major use in basic metals, electrical, and optical equipment.
In contrast, magnets are mainly used in the automotive sector, electrical and electronics, and machinery.
The report noted that the top sectors likely to be impacted by China's restrictions or bans on rare earth exports include transport equipment, basic metals, machinery, construction, and electrical and electronics. Such disruptions can affect both domestic production and exports.
Recognizing the strategic importance of these minerals, the Government of India has identified 30 minerals as critical for the country's economic security. To strengthen India's position, the government launched the National Critical Mineral Mission (NCMM) in 2025.
The mission aims to build a robust framework for achieving self-reliance in the critical mineral sector. A total fund allocation of Rs 18,000 crore has been made for the period 2025-2031.
The report analysis outlined that greater involvement by state governments in rare earth exploration and value chain development will not only enhance regional growth but also help the nation become less dependent on imports.