How Realistic is India’s Quest for Magnets Made of Rare Earths?
India seeks to establish its own rare earth magnets for domestic applications, aiming to reduce reliance on China in a critical segment of the global supply chain.
– In November 2025, India approved a significant plan worth 73 billion rupees (approximately $800 million) aimed at developing a robust rare earth magnet sector.
– Rare earth magnets are essential components found in electric vehicles, wind turbines, smartphones, medical scanners, and defense systems.
– By concentrating on magnet production, India hopes to accelerate self-sufficiency, as developing an entire rare earths ecosystem is costly and intricate.
– This initiative targets the production of 6,000 tonnes of permanent magnets annually within seven years, driven by rising domestic demand, which is projected to double in five years.
Challenges in India’s Rare Earth Magnet Production
However, experts caution that financial investment alone may not suffice:
– Presently, India imports 80-90% of its magnets and related materials from China, which controls over 90% of global rare earth processing.
– Official records indicate India imported around $221 million worth of magnets and raw materials in 2025.
– The country faced disruptions last year when China restricted exports during a trade conflict, significantly impacting Indian car manufacturers and electronics firms.
Industrial Expertise and Technological Gaps
India’s challenge is compounded by its lack of industrial expertise:
– Countries like Japan, South Korea, and Germany have invested years in perfecting magnet production technology, while India has minimal commercial-scale experience.
– Neha Mukherjee from Benchmark Mineral Intelligence notes, This is a good step in the right direction, but it’s only a start.
– Strategic partnerships will be crucial for India to acquire technology, enhance workforce skills, and establish its capabilities.
Dr. P.V. Sunder Raju, chief scientist at the National Geophysical Research Institute, emphasizes the need for robust research and development, stating, It’s not possible to just give 73 billion rupees and expect a product without a strong background in R&D.
Raw Material Availability and Production Capacity
India possesses the world’s third-largest rare earth reserves, accounting for about 8% of the global total, primarily located in the sands of coastal states such as Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra, and Gujarat.
– Despite this, India contributes less than 1% of global rare earth mining, with only one operational mine in Andhra Pradesh.
– Until recently, much of its output was earmarked for export to Japan under a bilateral agreement. However, India has initiated measures to prioritize domestic supply.
– India has set up the National Critical Mineral Mission (NCMM) to bolster mining and processing operations, maintaining stockpiles and ensuring supply chain resilience.
The Future of India’s Rare Earth Magnet Ecosystem
Even if India can tap into its reserves, there’s concern about the availability of essential magnet-making elements:
– While India has a surplus of lighter rare earths like neodymium, it lacks adequate quantities of heavier elements such as dysprosium and terbium, crucial for high-performance magnets.
– This leads to the critical question: if magnets are manufactured in India, will the raw materials still be sourced from China?
The scale of production poses another hurdle:
– India currently consumes about 7,000 tonnes of magnets annually. Meeting the target of 6,000 tonnes by the early 2030s may leave the country at risk of supply shortfalls as demand continues to rise.
– Neha Mukherjee warns, If we do not scale capacity, the problem doesn’t get solved. We’ll still be dependent on China—and China will scale.
Moreover, pricing is vital:
– Indian-made magnets must be competitively priced to prevent imports from dominating the market.
Conclusion: A Step Towards Self-Reliance
Despite the numerous hurdles, India’s initiative to develop a rare earth magnet sector signifies its ambition to foster a self-sufficient rare earth ecosystem.
– Rajnish Gupta from EY India states, I think this is certainly better than not having taken the step at all.
– The hope is for Indian entrepreneurs to drive innovation and establish a sustainable ecosystem. As India embarks on this journey, its quest for magnets made of rare earths reiterates its determination to enhance domestic capability and reduce vulnerability in the global supply chain.