India's Rare Earths Dilemma: Vast Reserves, Minimal Production. Will Budget 2026 Unlock Potential?

• India holds 6-8% of global rare earth reserves (6.9 million tonnes) but accounts for less than 1% of global production, highlighting a significant gap between potential and realization.
• Rare earth minerals are crucial for advanced electronics, EVs, defense, and semiconductors, making their supply chain a strategic global priority.
• China dominates the rare earth sector, controlling 70% of mining and 90% of refining capacity, posing a 'wake-up call' for India after export restrictions.
• Budget 2026 is expected to move beyond policy intentions, with calls for financial incentives, tax holidays, 'plug-and-play' hubs, and regulatory reforms to attract private investment.
• Challenges include long project timelines, high capital investment, lack of processing technology, and restrictions on monazite mining under the Atomic Energy Act and CRZ rules.

Why It Matters: India must transform its rare earth sector from policy to action, leveraging Budget 2026 to attract investment and reduce China dependence.