In a bid to make India self-reliant and Atma Nirbhar in the manufacturing sector, Union Finance Minister Nirmala Sitharaman in her Budget speech that was presented in Parliament on Feb 1, proposed the creation of rare earth corridors for mineral states of Odisha, Andhra Pradesh, Tamil Nadu and Kerala.
The proposal is a strategic move intended to counter China, which presently dominates over 60% of rare earth mining and nearly 90% of refining and magnet production. In fact, this dominance has given the dragon country a significant advantage and influence over industries spread across the world.
What are rare earth minerals: Rare earth elements (REE) comprise a group of 17 metallic elements, including 15 lanthanides (like neodymium, dysprosium, cerium) and scandium and yttrium
They are called “rare” as they are rarely found in pure, usable form and are difficult and expensive to process.
Why are they considered pricey
They are essential for high-performance magnets, electronics and clean energy technologies. Compared with oil that shaped geopolitics of the world a few decades ago, rare earths are a key input for electric vehicles, wind turbines, defence systems, consumer electronics and semiconductors, sectors central to India’s clean energy transition.
Where does India stand in rare earth minerals
Presently, India ranks third globally. According to a report by Amicus Growth, India holds about 6.9 million tons of rare earth oxide (REO) reserves, placing it behind only China and Brazil. China tops the list with 44 million tons of reserves, followed by Brazil with 21 million tons.
However, despite its strong reserve position, India’s production remains limited. In 2024, India produced only 2,900 tons of rare earths, ranking seventh globally. In comparison, China produced 270,000 tons, making it the clear global leader. The United States was the second-largest producer with 45,000 tons, followed by Myanmar (31,000 tons). Australia, Thailand and Nigeria each produced around 13,000 tons. The report highlighted that India holds nearly 6-7 per cent of global rare earth reserves yet contributes less than one per cent of global production.
Therefore, the recent proposal can go a long way in reducing the gap between extraction and production.
What does creation of rare earth mineral corridors mean?
Contrary to the belief that corridors are only for simple extraction, a rare earth corridor is a planned integrated network that connects mining of rare earth elements (REEs), conducts processing and refining of minerals, holds research and makes strategies for advanced manufacturing as also making way for logistics in terms of ports and transport.
Why is creation of this corridor a significant move?
Despite being a mineral rich country, India has been lagging behind other countries, especially China. This is because, for decades our factories have largely been responsible for assembling when it came to phones, defence equipment, electronics equipment, etc., by using importing components such as magnet, batteries, semiconductors that are highly dependent on rare earths.
Creation of rare earth corridors will give an impetus to the country’s manufacturing potential by integrating mining, processing, refining and then manufacturing the product.
It will reduce India dependence on imports, especially in the defence sector. It will enable India to create indigenous defence products critical to national security.
Most importantly, it will act as a shield against global supply shock, which is vulnerable to geopolitical shocks.
It will pave the way for making India as a manufacturing power apart from reducing the import bills of the country.
How it will place Odisha on the global map
Development of rare earth corridors is not just an industrial plan, it’s a strategic move as since a long time, despite being India’s mineral heartland with huge reserves of Iron ore, coal, bauxite, Odisha’s reserves were used only for extraction purposes and the state’s progress in the value chain didn’t get any major boost.
However, experts say creation of rare earth corridors will break that pattern unlike conventional mineral, rare earth’s value lies in its processing, refining and advanced manufacturing.
By integrating all these elements, coupled with creation of R&D centres and port-led exports, Odisha can redefine its economic growth from a raw material supplier to a strategic manufacturing hub.
It will create job opportunities, enhance skill development facilities. In other words, rare earth minerals can do for Odisha what electronics did for Taiwan or semiconductors for South Korea—create a specialised economic identity.
If implemented with proper vision and strategy, the rare earth corridor will go a long way in transforming Odisha’s economy by making it into a tech power from a resource rich state, anchoring India’s ambitions while serving the world’s needs.
