India to establish rare earth stockpile amid China-US trade tensions

New Delhi prepares to secure rare earth elements as China restricts exports and global trade friction rises

India begins building rare earth reserves

India is preparing to set up a rare earth stockpile to ensure medium-term supply security, the Economic Times reported on Monday. The initiative follows China’s ongoing trade tensions with the US and its new export restrictions on rare earth magnets.

Private sector to play active role

According to a senior government official, India plans to create a two-month reserve of key rare earth materials with private industry involvement. The strategy aims to protect India’s access to rare earth elements used in defense, electronics, and electric vehicle batteries.

“The initial focus is on rare earth elements,” the official told ET. The plan will later include other critical minerals needed for India’s energy transition and manufacturing sectors.

China dominates global supply

Currently, China controls about 60% of global rare earth magnet production. Amid trade frictions with Washington, Beijing has imposed restrictions on rare earth exports, raising global supply concerns.

India holds an estimated 7.23 million tonnes of rare earth elements, Minister of State for Science and Technology Jitendra Singh informed Parliament in July.

Government launches subsidy plan

New Delhi has introduced a $156 million subsidy program to promote local production of rare earth magnets. The initiative supports both public and private companies by offering incentives to develop domestic capacity across the production chain.