India unveils rare earth corridors with Odisha at the core of manufacturing push

India is accelerating its journey towards self-reliance in critical minerals with a comprehensive strategy that spans mining, processing, research and advanced manufacturing of Rare Earth Permanent Magnets (REPMs), placing Odisha among four key states identified as strategic hubs.

The Union Budget 2026–27 has announced the creation of Dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu, aimed at building a fully integrated ecosystem for rare earth development. The corridors will support activities ranging from mineral extraction and beneficiation to research and high-value manufacturing, positioning India as a competitive player in global advanced-material supply chains.

Major Push for Rare Earth Manufacturing

Central to this strategy is the Rs 7,280 crore Rare Earth Permanent Magnet Manufacturing Scheme, approved by the Union Cabinet in November 2025. The scheme targets the creation of 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India, covering the entire value chain—from rare earth oxides to finished magnets.

The initiative includes:

Rs 6,450 crore in sales-linked incentives spread over five years

Rs 750 crore as capital subsidy to support advanced manufacturing facilities

Allocation of capacity among up to five beneficiaries through global competitive bidding

A two-year gestation period followed by five years of performance-linked incentives

REPMs are critical components in electric vehicles, wind turbines, electronics, aerospace and defence systems, making domestic production essential for India’s clean energy transition and strategic autonomy.

Odisha and Other States Hold Strategic Mineral Advantage

India’s rare earth strategy is underpinned by a strong geological resource base. The country holds around 13.15 million tonnes of monazite, a key rare-earth-bearing mineral, containing approximately 7.23 million tonnes of rare earth oxides (REO).

These deposits are widely distributed across Odisha, Kerala, Andhra Pradesh, Tamil Nadu, West Bengal, Gujarat, Maharashtra and Jharkhand, primarily along coastal beach sands, teri/red sands and inland alluvial regions. In addition, hard-rock deposits in Gujarat and Rajasthan account for another 1.29 million tonnes of in-situ REO resources.

Further strengthening this base, the Geological Survey of India (GSI) has identified 482.6 million tonnes of rare-earth ore resources through 34 exploration projects, highlighting India’s long-term potential to support downstream industries like REPM manufacturing.

Why Investment Is Urgent

Despite its mineral endowment, India currently relies heavily on imports—largely from China—for permanent magnets. Between 2022 and 2025, imports accounted for 60–80% of the value and 85–90% of the quantity of domestic REPM consumption.

With demand for rare earth magnets expected to double by 2030, driven by electric mobility, renewable energy expansion, electronics manufacturing and defence needs, scaling up domestic capacity has become a strategic necessity.

Rare Earth Corridors and the Role of IREL

The newly announced corridors are designed to leverage existing infrastructure, particularly the presence of IREL (India) Limited, a public sector enterprise under the Department of Atomic Energy.

IREL operates mineral processing facilities in Odisha and Kerala, including a Rare Earth Extraction Plant in Odisha and a Rare Earth Refining Unit at Aluva in Kerala. With a processing capacity of 10 lakh tonnes per annum, IREL produces strategic minerals such as ilmenite, rutile, zircon, sillimanite and garnet.

By integrating IREL’s facilities with the corridor framework, the government aims to scale up rare earth production, strengthen research capabilities and accelerate value addition within mineral-rich states.

Aligned with National Priorities

India’s rare earth initiatives are closely aligned with broader national goals:

Atmanirbhar Bharat: Reducing import dependence and securing critical supply chains

Net Zero 2070: Supporting electric mobility and renewable energy through domestic magnet production

National Security: Ensuring uninterrupted access to materials essential for defence and aerospace systems

Also Read: India strengthens rare-earth mineral exploration; Odisha among key states with strategic deposits

These measures complement reforms under the Mines and Minerals (Development and Regulation) Act, amended in 2023, and the National Critical Minerals Mission, approved in January 2025, both aimed at strengthening exploration, private participation and long-term resource security.

With Odisha and other coastal states at the heart of this transformation, India’s rare earth roadmap marks a decisive shift—from being a resource holder to becoming a global hub for advanced materials and strategic manufacturing.