India’s rare earth processing push can transform auto & EV supply chains: Mayuresh Joshi

India’s long-awaited move to boost domestic rare earth processing has the potential to reshape manufacturing supply chains, sharply reduce reliance on China, and strengthen the country’s auto, EV and aerospace sectors, says Mayuresh Joshi, Head of Equity, Marketsmith India, talking to ET Now.

India holds large reserves of rare earth elements, yet processes less than 1% of global output, forcing critical industries to depend heavily on Chinese supplies. The government’s latest approval aims to change that.

A structural shift, not a short-term fix

Joshi calls the decision “a very positive move”, noting that India must first unlock its domestic mining potential, attract capital, and build processing capabilities that have historically been concentrated in China.


He says reducing dependence on Chinese exports is crucial, especially after Beijing’s earlier export restrictions created shortages across global supply chains.

“Once capital outlay is fixed, companies will start looking at rare earth processing aggressively. With timelines in place, technical capabilities will evolve, and the value chain will take shape,” Joshi notes.

Tech expertise will be built gradually

While Indian firms understand the mining and material assessment process, some technical know-how may need to be imported. Joshi believes this is feasible once investments start flowing and the ecosystem matures.

Auto, EV & aerospace to benefit the most

Recent supply bottlenecks hit automakers like Bajaj Auto and TVS Motor, who struggled when China curbed exports. The new scheme won’t resolve issues immediately, but Joshi sees major long-term gains:

• Auto and auto-component makers
• Electric vehicle manufacturers
• Aerospace industry

“This is not a quick-fix. But over the next few years, as domestic processing capacity ramps up, our overdependence on Chinese rare earths will reduce substantially.”

A multi-year transformation

The rollout will be gradual, involving:

• Detailed project planning
• Capital-intensive plant setup
• Absorption of global processing IP
• Timelines for domestic capacity expansion

But once operational, India could significantly enhance its strategic position in global supply chains.

Joshi concludes that the program will “offer a huge positive for the domestic ecosystem”, strengthening India’s competitiveness across advanced manufacturing sectors.