India to Begin Rare-Earth Magnet Production, Reducing China's Dependence

India is working on a ₹25 billion ($290 million) incentive plan to support domestic manufacturing of rare-earth magnets. These magnets are essential for electric vehicles, wind turbines, and other clean technologies. As per the reports, the draft policy is to go to the cabinet for approval shortly. The final funding amount may still be revised.

Large Companies Show Early Interest

Vedanta Group, JSW Group, and Sona BLW Precision Forgings Ltd are among the companies that have expressed initial interest. The proposal aims to help three to four large firms produce up to 4,000 tons of neodymium and praseodymium-based magnets using local raw materials over seven years.

China Controls 90% of Processing

China currently processes about 90% of the world’s rare earths. Recent export restrictions have disrupted global supply chains, prompting India to reduce its dependence. The Indian government is focusing on critical mineral security amid shifting geopolitical dynamics.

Structure of the Proposed Scheme

The plan includes a 2-year setup period, with incentives paid out over the next 5 years. The government may offer up to ₹6 billion for every 1,000 tons of production capacity. Companies will bid for capacities between 500 and 1,500 tons per year under the scheme.

To qualify, firms must ensure that at least 50% of the magnet’s value is derived from locally produced neodymium-praseodymium oxide. This requirement will increase to 80% by the 5th year of operations, according to the draft guidelines.

Read more: India Explores Rare Earth Magnet Production with Public and Private Sectors!

Current Challenges

Without subsidies, magnet production in India remains commercially unviable. The oxide is supplied by Indian Rare Earths Ltd, and projects are not profitable without both capital and operational support. Environmental and technical hurdles add further delays.

India’s past attempts to build rare-earth capacity, both domestically and through international tie-ups, are still in early phases. As per news reports, talks are ongoing with countries like Argentina, Zambia, and Australia for overseas mining concessions.

Conclusion

India is moving ahead with plans to localise rare-earth magnet production, but cost, expertise, and infrastructure gaps remain major barriers.

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