India’s Rare Earths Industry: A Case of Missed Opportunities

Economic and Political Weekly, Vol. 51, No. 3, Jan 16, 2016, pp. 27-33

S. Chandrashekar and Lalitha Sundaresan

EPWThe creation of knowledge in the rare earths domain in India is confined to a few government-run complexes with no major links to commercial industry. With interaction between the research community and industry non-existent, India’s position as a player in the global rare earths ecosystem is bound to be weak. Further, in the absence of a cohesive national strategy for moving the country up the value chain in rare earths into the intermediate and final product space, India continues to be a low-cost raw material supplier to the global rare earths industry.

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One thought on “India’s Rare Earths Industry: A Case of Missed Opportunities

  • This piece is a commendable analysis on an issue which relates to an exotic area, but, which is vital for our longer term economic development. The authors have devoted much time in drawing attention to the lack of interest in promoting research and also industries based on are earth. Apart from lack of strategic vision, the GOI under pressure to maintain fiscal deficits under control from the IMF/Bank did not have the economic muscle to engage in large value public investment. It decided to xport the raw material without any value addition. We got a farthing when compared with the value of the finished products.

    China as been a pioneer in the area and a few years ago it had global dominance amounting to 90 percent of global demand. It stopped exports to Japan when that country was involved in a provocative act and, leveraging Japan’s high dependence on imports from China, it was able to bring them to the peace table and get the release of arrested persons. What strikes a researcher is that China was able to foresee the future for rare earth thirty years earlier and invest substantial amounts in the extraction and making of rare earth based products. For some years, led to a virtual war with western countries . They dragged China into WTO courts and China lost some cases. Meanwhile, the western powers have been able to identify other sources and this has reduced China’s dominance somewhat. incidentally, extraction of ate earth from ore is a highly polluting and energy intensive activity and China paid a very high price. In recent years, it has been able to control them somewhat. Paradoxically, its argument before the WTO tribunal that it was cutting exports to improve environmental damage did not cut much ice! It is a sad story of double standards.

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