Why rare earth and advanced materials are critical to India’s next manufacturing leap

India’s manufacturing and energy ambitions are entering a decisive phase. From electric mobility and renewable energy to electronics, power infrastructure, and defence systems, the scale of industrial expansion underway is unprecedented. Policy support, capital investment, and domestic demand are aligning in a way rarely seen before. Yet beneath the conversation on factories, incentives, and capacity lies a quieter but far more consequential question: where will the materials come from? Rare earth elements and advanced materials have become the invisible backbone of modern manufacturing. Neodymium and dysprosium enable high-efficiency motors and wind turbines, high-purity copper and aluminium underpin grids and electronics, while lithium compounds, cobalt, and specialised alloys sit at the heart of batteries and power electronics. These materials may account for a small share of product weight, but they determine efficiency, reliability, and scale.

Over the last five years, global supply disruptions have exposed how fragile material supply chains can be. India currently imports more than 80 percent of its rare earth requirements and remains heavily dependent on overseas sources for battery-grade lithium and cobalt. At the same time, domestic demand is accelerating rapidly. India’s electric vehicle market is projected to grow at over 40 percent annually through the decade, while renewable energy capacity additions have consistently crossed 15 to 20 gigawatts each year.

Every additional EV, wind turbine, transmission line, or storage system intensifies pressure on supply chains that are already concentrated and geopolitically sensitive. Competing solely on mining is neither sufficient nor sustainable. Geological constraints, long permitting timelines, environmental considerations, and global market concentration make extraction an incomplete response to India’s material challenge.

India’s real opportunity lies in rethinking how materials are valued once products reach the end of their useful life. Over the past decade, the country has emerged as one of the world’s largest generators of end-of-life electronics, batteries, motors, cables, and industrial equipment. Industry estimates suggest India generates over 3.5 million tonnes of e-waste annually, with volumes rising steadily alongside digitisation, urbanisation, and electrification. Embedded within this waste stream is a significant concentration of recoverable copper, aluminium, rare earth magnets, and specialty metals, often at grades higher than primary ores. Yet for years, these materials have flowed largely through informal systems, where recovery was volume-driven but inconsistent in yield optimisation, environmental safeguards, and data traceability. As a result, secondary materials remained undervalued even as import dependence deepened.

This imbalance is now beginning to correct. Stronger extended producer responsibility frameworks, tighter environmental norms, and greater emphasis on formal recycling are gradually pushing the ecosystem toward accountability and scale. These changes are not merely regulatory. They reflect a shift in how materials are perceived, from waste to strategic assets. However, regulation alone will not deliver material security. Advanced material recovery is not a simple recycling exercise. It is a science-led process requiring precision engineering, chemistry, metallurgy, and process control, supported by reliable data that tracks materials across their lifecycle and reintegrates them into manufacturing supply chains with confidence.

Globally, countries leading in clean energy manufacturing are investing heavily in applied material research. International benchmarks show that spending on material science and circular economy research has more than doubled over the past decade in parts of East Asia and Europe. These investments focus on improving recovery yields, refining efficiency, and designing products that are easier to disassemble, refurbish, and recycle. India must build similar applied research capabilities that connect industry, academia, and policy, ensuring recovered materials meet the performance standards demanded by modern energy and manufacturing systems.

The strategic implications extend beyond sustainability. Manufacturing resilience in the coming decade will depend on how well companies understand and manage their material footprint. Firms reliant solely on linear, import-dependent supply chains will face cost volatility and disruption. Those that integrate secondary materials, refurbishment, and circular design will gain stability and competitiveness. This is particularly true for clean energy and mobility sectors, where material intensity is high and margins are sensitive to input shocks. Circularity does not eliminate imports, but it reduces exposure and creates buffers that matter at scale.

Rare earths and advanced materials should therefore be seen not as a niche environmental issue, but as a core pillar of India’s manufacturing and energy strategy. Material security is economic security. It underpins industrial competitiveness, energy transition goals, and long-term growth. The next manufacturing leap will not be defined only by how much India produces, but by how intelligently it manages the materials that make production possible.

The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.

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