India Takes Its First Big Leap to Break China’s Grip on Rare Earth Magnets, Launches ₹7,280-Crore Manufacturing Push

India’s Bold Push Toward Rare Earth Magnet Independence

India has begun a determined journey toward domestic production of rare earth permanent magnets (REPM), marking a pivotal step in reducing reliance on China.

In a significant move, the government has approved a ₹7,280-crore initiative aimed at building manufacturing capability for these strategically vital magnets within the country.

Rare earth permanent magnets are essential components used across advanced technologies — from electric vehicles, wind turbines, and renewable power systems to aerospace, electronics, and defence.

However, global production is overwhelmingly concentrated in a few nations, with China alone controlling more than 90% of both manufacturing and processing of the raw materials needed to produce REPM.

This monopoly has given Beijing considerable geopolitical leverage, often exercised during trade conflicts, including the export restrictions imposed earlier this year in retaliation for U.S. tariff actions.

Although some curbs have recently been eased, prolonged supply disruptions have forced countries worldwide, including India, to urgently diversify supply chains.

The REPM Manufacturing Scheme

The newly announced Indian scheme seeks to develop an integrated manufacturing capacity of 6,000 metric tonnes per year.

This capacity will be distributed among five selected companies, each eligible to produce up to 1,200 MTPA. Financial support includes:

• Sales-linked incentives worth ₹6,450 crore over five years
• Capital subsidy of ₹750 crore for setting up facilities

The programme specifically targets the production of sintered NdFeB (neodymium-iron-boron) magnets, recognised as the strongest and most commercially critical form of REPM.

These magnets typically combine light rare-earth materials such as neodymium (Nd) and praseodymium (Pr) with iron (Fe) and boron (B), and incorporate heavy rare-earth elements like dysprosium (Dy) and terbium (Tb) to enhance heat resistance and prevent demagnetisation.

Currently, India imports nearly all of its rare earth magnet requirements. In 2024-25 alone, the country imported over 53,000 tonnes, with more than 90% sourced from China.

Challenges Ahead

While India aims to position itself as a significant global player, the road ahead is complex. China’s capacity — estimated at 240,000 tonnes annually — dwarfs India’s planned capacity.

Moreover, India does not yet produce heavy rare-earth oxides domestically, which are vital for high-performance magnets.

Although Indian Rare Earths Limited (IREL) produces limited volumes of light rare-earth oxides, they fall short of industry needs.

Experts argue that cost competitiveness remains a major hurdle, as China’s vertically integrated value chain and large-scale production allow for significantly lower pricing.

Steps Toward Strategic Autonomy

In recent years, India has accelerated efforts to secure access to critical minerals and strengthen the entire value chain:

• National Critical Mineral Mission (NCMM) launched in January 2024 with an outlay of ₹16,300 crore, focusing on exploration, processing and recycling.
• Auctioning of 34 critical mineral blocks following amendments to the MMDR Act, enabling exclusive government auctions of strategic minerals.
• Setting up Khanij Bidesh India Limited (KABIL) to secure mineral assets overseas, including lithium exploration projects in Argentina.
• Participation in Quad supply chain initiatives and endorsement of the G7 Critical Minerals Action Plan.

The Road Ahead

India’s REPM initiative marks an important beginning rather than the final destination.

Building self-reliance will require long-term investment, supply-chain development, advanced research, and partnerships.

However, with rising domestic demand driven by renewable power growth and rapid EV adoption, the stakes — and opportunities — are immense.

#RareEarthMagnets #MadeInIndia #AatmanirbharBharat #CriticalMinerals #EVRevolution #RenewableEnergy #TechManufacturing #StrategicIndependence #EconomicSecurity #BreakingChinaDependence