India unveils $800 million push for rare earth magnet production

Dubai: India has approved a landmark plan worth more than $800 million (Rs7,200 crore) to boost domestic production of rare earth permanent magnets, in a major push to secure critical supply chains and reduce the country’s overwhelming dependence on imports — particularly from China.

Rare earth permanent magnets (REPMs), made from specialised alloys of rare earth elements, are among the strongest magnets in the world. They are essential to a vast range of high-technology applications, including electric vehicles (EVs), wind turbines, missiles and drones, satellites, smartphones, medical imaging systems and industrial automation.

India currently imports nearly all the high-grade magnets it needs. With domestic demand expected to double by 2030, officials say building a homegrown magnet ecosystem has become a strategic necessity — especially after China’s export curbs earlier this year highlighted global supply vulnerabilities.

The federal Cabinet has cleared a Rs72.8 billion scheme aimed at creating India’s first fully integrated REPM manufacturing ecosystem. The initiative is designed to establish 6,000 metric tonnes per year (MTPA) of magnet-making capacity — a scale never attempted in the country.

Establish 6,000 MTPA of integrated manufacturing

Reduce import dependence and boost self-reliance

Position India as a competitive global magnet supplier

Support clean energy and EV sector growth

Strengthen strategic and defence supply chains

“This first-of-its-kind initiative aims to establish 6,000 MTPA of integrated REPM manufacturing in India, thereby enhancing self-reliance and positioning India as a key player in the global REPM market,” the statement said.

Rs6,450 crore in sales-linked incentives spread over five years

Rs750 crore in capital subsidies for setting up manufacturing facilities

Support for advanced material R&D

A policy push to attract global and domestic investors

Incentives for companies in EVs, consumer electronics, wind energy and defence

Officials say the move is also aligned with India’s Net Zero 2070 target, since REPMs are critical for expanding wind energy capacity and electrifying transport.

The Automotive Component Manufacturers Association of India (ACMA) said the move will build long-term stability for the EV and automotive sectors.

“It provides long-term resilience to the automotive supply chain,” ACMA president Vikrampati Singhania said. “This is a strategic and forward-looking intervention that addresses one of the most critical gaps in the EV and advanced mobility ecosystem.”

Domestic manufacturers have long depended on imports from China, Japan, South Korea and parts of Europe. But the global market remains heavily concentrated, with China controlling most stages — mining, refining and magnet production. Supply shocks in recent months exposed India’s vulnerability, officials said.

The new scheme seeks to close gaps in processing, metallurgy, and integrated production — long-standing barriers that prevented India from moving beyond raw rare earth extraction.

REPMs are central to modern technology because they enable compact, energy-efficient motors with high power density. They are indispensable for:

Electric vehicle motors

Wind turbine generators

Defence platforms including missiles, radars and drones

Satellites and aerospace systems

Medical devices such as MRI machines

Smartphones, laptops and advanced electronics

Robotics and industrial automation

As India accelerates EV adoption, expands renewable power, and upgrades its defence capability, demand is expected to soar.

While India does have rare earth mineral reserves, it lacks large-scale processing and magnet-making capacity — gaps the new scheme aims to eliminate.

Create thousands of high-skilled jobs

Reduce import bills

Strengthen strategic autonomy

Global supply dominated by China

Support key industries from EVs to aerospace