Budget 2026: India’s big push to break China’s rare earth monopoly

New Delhi (The Uttam Hindu): While presenting the budget in the Parliament, the Finance Minister made a major announcement keeping in mind the strategic and security interests of the country. The government has announced to build a special corridor for 'Rare Earth Minerals' in the country. The direct objective of this step is to make India self-reliant in this important sector and to end the long-standing dependence on China. The Finance Minister informed that these special corridors will be constructed in four states of the country, which will not only speed up the mining, processing and supply chain of these minerals but will also make it more reliable.

Roadmap to end 90% dependence on China

Rare earth elements (REEs) are considered the backbone of manufacturing, electric vehicles (EVs), renewable energy, and the defense sector today. Currently, India imports approximately 90 percent of its requirements from China, posing a significant strategic risk. The government has taken several concrete steps to reduce this dependence by 2025-2026. The government's focus now is on expanding the exploration and production capacity of these minerals domestically, so that any future geopolitical crisis does not impact India's supply chain.

Budget of crores and support of PLI scheme

The government has opened its coffers to boost this sector. The National Critical Mineral Mission was launched in January 2025, with a total budget of ₹16,300 crore (approximately $1.6 billion). Under this mission, work is underway to develop approximately 1,200 exploration projects and processing facilities. In addition, a ₹7,350 crore (approximately $1.7 billion) PLI scheme was launched in November 2025 to promote the production of rare earth magnets. This scheme aims to create a 6,000 MTPA (million metric tonne) manufacturing capacity domestically.

Major reforms in mining laws and entry of private sector

The government has also removed major obstacles at the policy level. As part of mining reforms, the MMDR Act was amended to include rare earth elements in Part D. This has opened the door to the private sector, and more than 20 blocks have been auctioned so far. In a significant change, monazite has been removed from the atomic list. To prevent project delays, a decision was made in September 2025 to exempt critical mineral projects from public hearings. Experts believe these corridors will be a game-changer for India's strategic security.