India Explores Rare Earth Magnet Production with Public and Private Sectors

The Indian government is looking into the possibility of manufacturing rare earth magnets domestically, amid increasing challenges in importing them from China, as per CNBC TV18 reports. These magnets are used in a range of industries, including electric vehicles, electronics, and defence.

Government Discussions 

According to a news report, the Centre is currently evaluating how India Rare Earths Ltd., a public sector enterprise, could be used for rare earth magnet production. The plan also includes the potential involvement of private companies to jointly build manufacturing capacity in India.

Export Restrictions from China Prompt Action

This development comes in response to China tightening its export rules around rare earth elements and related products. Indian firms have been facing delays and difficulties in securing export licences from Chinese authorities. The issue has gained attention due to its potential impact on key manufacturing sectors.

Meetings with Industry Stakeholders

Commerce and Industry Minister Piyush Goyal has held meetings with automakers to assess the possible short-term impact of China’s export controls. On June 10, 2025, the Directorate General of Foreign Trade (DGFT) also met with automobile companies to gather more information on the licensing challenges they’re facing when trying to source rare earth magnets from China.

Diplomatic Engagement

The matter has also been taken up at the diplomatic level. The Indian Embassy in China has contacted the Chinese Ministry of Commerce to request more clarity in the export licensing process. India is seeking quicker approvals and more transparent procedures.

Read more: Why Rare Earth Magnets Are Crucial in the Electric Vehicle Industry!

Policy Support Under Consideration

To support domestic manufacturing, the government is considering introducing a Production-Linked Incentive (PLI) scheme. Capital subsidies and other forms of financial support are also being explored. These steps are aimed at reducing dependence on imports and building long-term supply resilience.

Conclusion

The government is still in the process of evaluating its options. No final decisions have been made, but the discussions showcase growing efforts to address supply chain risks in key sectors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.