Business
Budget 2026: How India Can Blunt China’s Rare Earth Minerals Dominance
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India holds an estimated 6-8% of global rare earth reserves but instead of exporting value-added products, the country largely exports concentrates and imports finished components
China controls around 70% of global rare earth mining and nearly 90% of refining and processing capacity. (Representational image)
Major global powers are investing billions of dollars to secure the supply chain of critical minerals, particularly rare earths, to cut their dependence on China. Against this backdrop, India is expected to move beyond policy intent and announce concrete measures on mining, processing and downstream manufacturing of rare earths in Budget 2026.
India holds nearly 6-8% of the world’s rare earth reserves, estimated at about 6.9 million tonnes, yet its share in global production is less than 1%. The contrast is stark. Despite sizeable reserves, India has failed to convert this advantage into strategic strength. The key question is whether Budget 2026 can translate this momentum into a full-fledged rare earths push and meaningfully reduce India’s dependence on China in what is fast emerging as the decade’s most critical resource contest.
Oil wells shaped global geopolitics in the 20th century. In the 21st, advanced electronics, electric vehicles (EVs), defence systems and the semiconductor industry depend almost entirely on rare earth minerals. Without these 17 elements including neodymium, dysprosium and lanthanum, wind turbines cannot spin and precision-guided missiles cannot function. Securing rare earth supplies has therefore become a strategic imperative for India. Major economies have already moved decisively. The European Union has committed €3 billion to cut reliance on China, while the United States is forging new mineral alliances and building industrial ecosystems.
China’s dominance
According to an ET Now report, China’s dominance in the sector is both overwhelming and unsettling. China controls around 70% of global rare earth mining and nearly 90% of refining and processing capacity. Last year, when China imposed export restrictions on seven key rare earth elements, global automobile and defence supply chains were jolted.
India’s efforts
India has initiated steps to reduce import dependence through the National Critical Mineral Mission (NCMM). However, industry leaders and policy experts argue that Budget 2026 must go further by lowering risks for private investment. The expectation is not limited to subsidies; the industry is seeking a comprehensive ecosystem that enables private capital to participate meaningfully. This would require long-term financing, targeted tax incentives, assured offtake arrangements and incentives across the value chain. Without these measures, India risks remaining stuck at the policy stage while global competitors race ahead.
Government’s expectations
China’s strength does not stem from cheap labour alone, but from decades of process engineering expertise and state-backed price controls. Experts say India must draw lessons from countries such as Australia and Japan, where governments actively partner with private firms to build strategic stockpiles. Market participants point to four key areas where government action is critical:
1. Financial incentives and expansion of PLI: The existing Rs 7,280-crore production-linked incentive (PLI) scheme for magnets is seen as a positive step, but experts say it must be extended upstream to cover oxide and metal manufacturing. Without domestic production of raw metals, magnet manufacturing in India will struggle to remain cost-competitive.
2. Tax holidays and long-term financing: Rare earth projects have long gestation periods, often taking years to reach profitability. The budget is expected to consider a 10 to 15-year tax holiday and access to low-interest, long-tenure loans to attract investors.
3. Plug-and-play hubs, on the lines of semiconductor clusters: The government is being urged to develop infrastructure hubs, particularly in coastal regions, with shared processing facilities. Such hubs could significantly lower costs for small and mid-sized developers.
4. Regulatory reforms: Industry has called for easing restrictions on monazite by delinking it from stringent nuclear regulations, improving transparency in commercial mining, and offering strategic relaxations under Coastal Regulation Zone (CRZ) norms.
Vedanta Resources CEO Deshani Naidu has said the government’s focus on critical minerals under the NCMM is providing much-needed impetus. Securing metals and minerals, she noted, is essential for India’s infrastructure build-out and energy transition.
Abundant reserves, extremely low production
India holds an estimated 6-8% of global rare earth reserves but instead of exporting value-added products, the country largely exports concentrates and imports finished components such as magnets and motors.
Abhinav Sengupta, Associate Director at PwC India, points out that India has the reserves but lacks the ecosystem. Mining, he says, is only the first step; the real challenge lies in processing, refining and separation. India also remains weak in midstream capabilities, particularly magnet manufacturing. Delays in beach sand mining due to radioactive thorium concerns and CRZ regulations, coupled with a shortage of expertise in rare earth chemistry and process engineering, have compounded the problem.
Monazite, India’s primary source of rare earths, is widely found in coastal beach sands across Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra and Gujarat, with additional inland deposits in Jharkhand and West Bengal. However, private participation was long barred under the Atomic Energy Act, with limited opening up only beginning in 2023. Long project timelines, heavy capital requirements, a lack of deposit-specific processing technologies and uncertain returns have continued to deter investors.
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January 16, 2026, 20:16 IST
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Kevin Hassett, director of the National Economic Council, speaks to members of the media outside the White House in Washington, DC, US, on Friday, Oct. 24, 2025.
Francis Chung | Bloomberg | Getty Images
White House economic advisor Kevin Hassett said Friday that large U.S. banks could voluntarily provide credit cards to underserved Americans as a means to address President Donald Trump’s affordability push.
A week ago, Trump called for banks to cap credit card interest rates at 10%, an idea that has been roundly rejected by industry executives and their lobbyists this week.
Now, Hassett, who is director of the National Economic Council, is floating a different plan, this one more narrowly focused on consumers who don’t have credit access but have the income to justify credit lines.
“They could potentially voluntarily provide for people who are in that sort of sweet spot of not having financial leverage very much because they don’t have access to credit, but they have enough income and stability in their lives so they’re worthy of credit,” Hassett told Fox Business host Maria Bartiromo.
“Our expectation is that it won’t necessarily require legislation, because there will be really great new ‘Trump cards’ presented for folks that are voluntarily provided by the banks,” he said.
The comments could indicate that the administration is downgrading its efforts for broad changes to the card industry that would be difficult to enact and that could hit consumer spending and the economy.
This week, bankers discussing fourth-quarter results said that rather than offering cards at a 10% interest rate, as Trump has said should happen by Jan. 20, the banks would simply close many customers’ accounts.
Hassett’s statement came in response to a question about whether bankers would be forced to comply with Trump’s rate cap, a move that would probably require new legislation.
The administration has been talking with “CEOs of many of the big banks who think that the president’s onto something,” Hassett said.
A major credit card issuer and a bank lobbyist representing big lenders told CNBC that they haven’t yet had any discussions with the administration about the “Trump card” concept.
Stocks in London ended little changed on Friday, with blue chips edging lower after notching another record as investors held fire ahead of the long weekend in the US.
“Investors have been kept on their toes year-to-date with non-stop geopolitical issues, and mixed messages from the business world. A quieter day on the corporate reporting calendar gave investors a chance to catch their breath and take stock of events,” said Dan Coatsworth, head of markets at AJ Bell.
The FTSE 100 index closed down just 3.65 points at 10,235.29. It had earlier hit a new intra-day best level of 10,257.75.
The FTSE 250 ended up 31.39 points, 0.1%, at 23,311.37, and the AIM All-Share closed just 0.27 of a point higher at 804.75.
For the week, the FTSE 100 rose 1.1%, the FTSE 250 climbed 1.2%, and the AIM All-Share advanced 2.1%.
In European equities on Friday, the CAC 40 in Paris closed down 0.7%, while the DAX 40 in Frankfurt ended 0.2% lower.
“There was a slightly negative tone across European stock indices on Friday,” commented David Morrison, senior market analyst, at Trade Nation. “It appeared that investors were more comfortable taking some risk off the table, no doubt mindful that US markets will be closed on Monday for Martin Luther King Day.”
In London, the FTSE 100 was pegged back by weak mining stocks, a key factor behind recent index strength.
The price of copper fell 3.0%, and silver slumped 3.7%, giving up some recent gains, while gold nursed less severe falls.
Gold was quoted at 4,594.24 dollars an ounce on Friday, down from 4,616.76 on Thursday.
In response, Endeavour Mining fell 2.7%, Anglo American declined 2.4%, Antofagasta dipped 2.9%, and Glencore fell 2.5%.
Strategists at Bank of America downgraded the mining sector to ‘underweight’ and lifted energy to ‘market weight’.
“After sharp outperformance for mining, the potential downside risks stemming from the sector’s macro drivers are becoming hard to ignore,” BofA said.
BofA noted that a historical divergence in commodity prices has led to a decoupling among European resources with a surge in metal prices over recent months, including a 50% rally in copper, alongside a “roll-over” in energy prices, with the oil price down 30% to four-year lows recently.
As a result, the copper-to-oil ratio has risen close to a 40-year high, which in turn has led to significant divergence between European resources sectors, with mining outperforming by 40% since April, while energy has underperformed by nearly 15%.
“Resources sector pricing looks stretched in both directions,” BofA added.
Brent oil traded higher at 64.48 dollars a barrel on Friday, up from 63.55 late on Thursday.
Pearson ended a miserable week for investors, with a further 4.1% decline.
The educational publisher has seen its shares fall 12% this week after a poorly received trading update.
A previously undisclosed contract loss for US student assessment in New Jersey, which will drag on first-half growth, was blamed for the stock fall, although analysts note Pearson is confident that the loss of the contract will have no bearing on other renewals in the coming years.
Heading higher were property companies British Land and Land Securities, up 1.4% and 1.3% respectively, on hopes lower interest rates will spark a sector upturn, while BAE Systems, up 2.3%, remained in favour amid geopolitical jitters.
Stocks in New York were little changed. The Dow Jones Industrial Average was slightly lower, while the S&P 500 index was up 0.1%, as was the Nasdaq Composite.
Economic data showed that US industrial production rose faster than expected in December.
The Federal Reserve said that on a monthly basis, industrial production increased by 0.4% in December, the same pace as in November, which was revised up from 0.2%. It was better than the FXStreet-cited consensus of a 0.1% uptick.
On an annual basis, total industrial production was 2.0% higher in December than a year prior.
Shannon Glein, analyst at Wells Fargo, said the underlying details show a “key theme from last year – everything high-tech and AI related outperformed”.
“We expect this trend to persist going forward, but it’s also worth noting that the slow yet steady ascent in all other industrial production on a year-ago basis is a sign that broader activity may be starting to recover,” she added.
The pound was quoted lower at 1.3382 dollars at the time of the London equities close on Friday, compared to 1.3388 on Thursday.
The euro stood at 1.1596 dollars, lower against 1.1607.
The yield on the US 10-year Treasury was quoted at 4.21%, widening from 4.16%. The yield on the US 30-year Treasury was quoted at 4.82%, stretched from 4.78%.
Back in London, Genus led the FTSE 250 risers, advancing 7.8%, after reporting that adjusted pretax profit for the six months to December 31 would be about £50 million, ahead of expectations.
Berenberg pointed out it was “the second guidance raise in the past three months, making it one of the standout performers within our coverage”.
“Importantly, the upgrades are being driven by strong trading in the PIC (pigs) business, which reflects the benefits of the group’s shift towards a royalty-driven model. This is increasing the defensiveness and predictability of earnings and sets a very positive tone for a year that we believe has more positive catalysts to come”, the bank added.
The biggest risers on the FTSE 100 were BAE Systems, up 47.0 pence at 2,088.0p, NatWest, up 13.8p at 652.8p, Smiths Group, up 50.0p at 2,612.0p, Schroders, up 8.6p at 467.0p and National Grid, up 20.5p at 1,201.5p.
The biggest fallers on the FTSE 100 were Pearson, down 39.6p at 939.0p, Entain, down 23.8p at 703.0p, Antofagasta, down 105.0p at 3,560.0p, Endeavour Mining, down 110.0p at 3,996.0p and Glencore, down 12.4p at 478.6p.
Monday’s global economic calendar features a slew of data from China, including GDP, retail sales, and industrial production.
In Canada, inflation figures will be published, while US financial markets are closed for Martin Luther King Jr Day.
Monday’s UK corporate calendar has a trading statement from building materials firm Marshalls.
Later in the week, trading statements are due from luxury goods retailer Burberry, sports retailer JD Sports Fashion and miner Rio Tinto.
Contributed by Alliance News.
Car-sharing firm Zipcar has confirmed it is stopping operations in the UK after launching a consultation late last year.
The move will hit the company’s roughly 650,000 drivers across the country.
On December 1, the US-based company told customers in the UK that it planned to suspend new bookings temporarily at the turn of the year.
The business, which had 71 UK employees at the end of 2024, launched a formal consultation with staff as a result.
On Friday, in a fresh email to customers, the business said it “can now confirm that Zipcar will cease operating in the UK”.
The company added: “In accordance with clause 7.5 of the member terms, please take this as your written notice that we will formally close your account in 30 days’ time.
“It’s not possible to make any new bookings with Zipcar UK at this time, but your account will remain open until February 16.”
It added that customers will be entitled to a pro-rated refund for any remaining periods on current plans or subscriptions, from the start of 2026.
Zipcar said this will be done automatically and will not require any action from users.
Accounts showed that the van and car hire firm saw losses deepen to £5.7 million in 2024 after a decrease in customer trips.
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