India holds the world’s third-largest rare earth reserves, yet its production remains among the lowest globally, underscoring a sharp disconnect between resource availability and actual output, according to a report by Amicus Growth.

The data shows that India has around 6.9 million tonnes of rare earth oxide (REO) reserves, ranking behind only China, with 44 million tonnes, and Brazil, with 21 million tonnes. Other countries with significant reserves include Australia at 5.7 million tonnes, Russia at 3.8 million tonnes, Vietnam at 3.5 million tonnes and the United States at 1.9 million tonnes.

Despite this strong reserve base, India’s production remains limited. In 2024, the country produced just 2,900 tonnes of rare earths, placing it seventh globally. By contrast, China produced about 270,000 tonnes, cementing its position as the dominant global producer. The United States followed with 45,000 tonnes, while Myanmar produced 31,000 tonnes. Australia, Thailand and Nigeria each recorded output of around 13,000 tonnes.

The report noted that India accounts for nearly 6–7 per cent of global rare earth reserves but contributes less than 1 per cent of global production. A large portion of India’s reserves are located in monazite-rich coastal sands, which also contain thorium, a radioactive element. This has made mining and processing more complex and subject to stringent regulatory controls.

Regulatory hurdles have historically constrained the sector, the report said. For decades, rare earth production in India was largely restricted and handled primarily by Indian Rare Earths Limited (IREL), where rare earth elements were treated as by-products rather than as strategic resources.

Beyond mining, processing and refining remain the biggest bottlenecks. While rare earth reserves are distributed across several countries, refining capacity is highly concentrated. China controls about 90 per cent of global rare earth refining capacity and almost the entire processing of heavy rare earth elements, giving it a decisive advantage across the value chain.

India, by contrast, has minimal processing and refining capacity. “Annual production has been only a few thousand tonnes, and India has played virtually no role in global REE trade,” the report said. Although a Japan-linked joint venture in Visakhapatnam marks India’s re-entry into the rare earth sector, operations remain small in scale.

Globally, rare earth reserves are estimated at around 90–110 million tonnes of REO, with China alone holding nearly half of the total. This further reinforces its dominance in supply, processing and production.

The report concluded that India’s challenge lies not in the lack of resources but in execution gaps, limited processing capacity and weak value-chain integration. Without addressing these issues, India’s substantial reserves are unlikely to translate into meaningful global influence in the rare earth sector.