India Plans Domestic Rare Earth Permanent Magnet Production to Reduce Import Dependence

India is preparing to establish domestic production of rare earth permanent magnets as part of a broader strategy to secure critical industrial materials. 

The initiative, supported by government funding and private sector participation, aims to strengthen supply chains for industries such as electric vehicles, renewable energy and defence. 

The move comes amid rising global competition for rare-earth resources and growing concerns over supply concentration.

Government Push for Local Manufacturing

The Union government has outlined plans to begin producing rare earth permanent magnets within the year through collaboration with private industry partners. 

The initiative forms part of India’s effort to reduce dependence on imported critical materials that are essential for modern manufacturing and clean energy technologies.

A manufacturing programme worth ₹73 billion was approved in November to support the development of domestic capabilities in magnet production and processing.

Importance of RareEarth Permanent Magnets

Rare-earth permanent magnets play a key role across multiple sectors, including electric mobility, aerospace systems, defence equipment and renewable energy infrastructure. 

These magnets are widely used in electric motors, wind turbines and advanced electronic systems due to their efficiency and durability.

As industrial electrification expands, demand for such components is expected to increase steadily, making secure supply chains increasingly important.

Technology Development and Processing Plans

According to the mining ministry, technology required for manufacturing these magnets has already been developed through collaboration between the ministry and a state-run organisation. 

Plans are underway to establish four critical mineral processing facilities across different states to support large scale production.

These facilities are expected to form the foundation of India’s domestic rare-earth processing ecosystem.

Resource Availability and Investment Challenges

India possesses the world’s third largest rare earth reserves, estimated at around 6.9 million tonnes, based on data from international geological assessments. 

Despite this resource base, only a limited portion is currently mined, largely due to relatively low private investment in extraction and processing activities.

Expanding domestic participation is viewed as essential to unlocking the country’s mineral potential.

Global Supply Dynamics and Strategic Context

India’s move comes amid tightening global supply conditions. China currently dominates rare-earth processing, accounting for a significant share of global refining capacity. 

Export restrictions introduced last year disrupted supply chains, particularly affecting automotive manufacturers reliant on imported components.

With domestic consumption of rare-earth permanent magnets projected to double by 2030, reducing reliance on external suppliers has become a strategic priority.

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Conclusion

India’s plan to begin producing rare earth permanent magnets reflects a broader effort to strengthen industrial self reliance in critical materials. By developing processing infrastructure and encouraging private sector participation, the country aims to support growing domestic demand while improving supply resilience across key manufacturing sectors.

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