Why in the News?

In Union Budget 2026-27, Finance Minister Nirmala Sitharaman announced the establishment of dedicated Rare Earth Corridors in the coastal states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to strengthen India’s critical minerals and advanced manufacturing ecosystem.

What are Rare Earth Corridors?

• State focused industrial corridors for Mining, Processing, Research andManufacturing of rare earth elements
• Aim to integrate upstream mining with downstream value addition
• Anchored in mineral rich coastal regions with Beach Sand Minerals

Rare Earths in Indian Context

• Principal source: Beach Sand Minerals (BSM)
• Key mineral present: Monazite
  • A phosphate mineral
  • Contains Uranium and Thorium
• Coastal states have rich deposits capable of producing rare earths like Neodymium and Praseodymium

Link with Rare Earth Magnet Manufacturing Scheme

• Corridors align with the scheme for Sintered Rare Earth Permanent Magnets
• Financial outlay: Rs 7,280 crore
• Target capacity:
  • 6,000 metric tonnes per annum
  • 5 beneficiaries selected via competitive bidding
  • Up to 1,200 MTPA per beneficiary
• Incentives:
  • Rs 6,450 crore sales linked incentive over 5 years
  • Rs 750 crore capital subsidy

Why Rare Earth Permanent Magnets Matter

• Critical for: Electric vehicles, Wind turbines and renewable energy, Electronics and Aerospace and defence.
• Global concentration: China controls over 90 percent of processing and magnet manufacturing
• India imported over 53,000 metric tonnes of rare earth magnets in FY 2024-25
• Domestic demand expected to double by 2030

Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

Attend Now