India's Rare Earth Magnet Imports Soar to $291 Million in FY25 Amid China Ban: SBI Report

India's reliance on imported rare earth magnets has intensified in FY25, with the total value touching $291 million, as highlighted in a recent report by the State Bank of India. The spike comes amid China’s export restrictions on rare earth elements and permanent magnets, posing challenges to several domestic industries and prompting strategic government responses.

Imports Surge and Impacted Sectors

The SBI report titled ‘China’s ban on Rare Earth and Permanent Magnets: Implications for India’ states that rare earth magnet imports composed of alloys derived from rare earth minerals rose sharply in FY25 to $291 million. This figure is significantly higher than the $249 million annual average recorded over the past 4 years. 

While the total imports of rare earth minerals and compounds have averaged around $33 million per year during the same period, they stood slightly lower at $31.9 million in FY25. 

China’s export restrictions are expected to severely affect several key sectors in India, including transport equipment, basic metals, machinery, construction, electrical, and electronics, according to the SBI. The report noted that both domestic production and exports in these sectors will be impacted by the continuing supply bottlenecks.

Government Response and Domestic Efforts 

In response to this growing vulnerability, the Indian government launched the National Critical Mineral Mission (NCMM) in 2025, aiming to establish long-term self-reliance in the critical mineral sector. A funding allocation of ₹18,000 crore has been set aside for this mission, covering the period between 2025 and 2031. 

The SBI also stressed the pivotal role of state governments in building the domestic value chain, noting that several states have already issued notices inviting tenders (NITs) for auctioning exploration licences related to these critical minerals.

Impact on EV Sector and Industry Alternatives

The rare earth magnet shortage has also disrupted India’s rapidly growing electric vehicle industry. Major manufacturers such as Bajaj Auto, TVS Motor, and Ather Energy are reportedly considering production cuts in light of supply limitations. 

As a result, companies are exploring alternative technologies to mitigate the crisis. Some are turning to ferrite magnets, which are more readily available, while others are experimenting with electric vehicle motors that do not rely on rare earth magnets.

Also Read: India Plans ₹1,345 Crore Incentive Scheme to Boost Rare Earth Magnet Manufacturing!

Conclusion

With rare earth magnet imports surging and critical sectors under pressure, India is confronting the real-world implications of global supply dependency. The government’s timely intervention through the NCMM and industry’s pivot towards alternative solutions reflect a determined push towards resilience and self-reliance in the strategic mineral ecosystem.

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