Missing measure in India’s magnet mission
A recent commentary examined India's push to reduce dependence on China for rare-earth magnets, arguing that the core policy challenge lies not in whether India has rare-earth resources or can cut imports, but in what happens in the processing and refining stage in between.
India has approved a suite of measures over the past year to build a domestic rare-earth value chain, including exploration funding, a dedicated magnet-manufacturing incentive scheme, and legal changes enabling private participation in critical mineral mining.
The commentary highlighted that resource endowment and import substitution targets are not, by themselves, sufficient measures of progress — the intermediate refining and magnet-making capacity is the actual bottleneck.
The discussion comes against the backdrop of tightened export licensing by China on several rare-earth elements and magnets since April 2025, which exposed the fragility of global supply chains dependent on a single dominant supplier.
National Critical Mineral Mission (NCMM), 2025
The National Critical Mineral Mission is the Union government's flagship programme to secure the upstream (exploration and mining) end of the critical minerals value chain, approved by the Union Cabinet in January 2025. It responds to India's near-total import dependence on a small number of countries — chiefly China — for critical and strategic minerals used in electronics, defence, renewable energy, and electric mobility.
The NCMM addresses the "upstream" resource-availability half of the rare-earth question the commentary raises, but by itself does not solve the mid-stream refining and magnet-manufacturing gap that the article identifies as the real bottleneck.
Mines and Minerals (Development and Regulation) Amendment Act, 2023
This amendment to the MMDR Act, 1957 restructured India's legal framework for critical minerals by creating a new category of "critical and strategic minerals," opening them to private and foreign participation, and centralising their auction with the Union government.
Key Details
- In force from 17 August 2023; inserted Part D into the First Schedule of the MMDR Act listing 24 critical and strategic minerals, including the rare earth elements group (excluding uranium and thorium-bearing minerals, which remain atomic minerals).
- Removed six minerals — including some previously reserved for exclusive government exploitation — from the list of "atomic minerals," enabling private mining for the first time.
- Empowers the Union government (not state governments) to conduct auctions for critical mineral concessions; auction revenue still accrues to state governments.
- Introduced a new "Exploration Licence" (EL) to attract private and foreign investment into high-risk, deep-seated mineral exploration, including for rare earths.
This 2023 legal change is what made India's current rare-earth push structurally possible by opening exploration and mining of rare-earth-bearing minerals beyond the erstwhile state monopoly — but it addresses only the mining stage, not the separation, refining, and magnet-sintering stages the article says are being under-measured.
Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM Scheme)
Approved by the Union Cabinet in November 2025 and administered by the Ministry of Heavy Industries, this is India's first dedicated incentive scheme for domestic manufacturing of rare-earth permanent magnets — the mid-to-downstream segment the commentary says needs better measurement and tracking.
Key Details
- Total financial outlay: Rs 7,280 crore, comprising Rs 6,450 crore of sales-linked incentives disbursed over five years and Rs 750 crore of capital subsidy for setting up manufacturing facilities.
- Target: an aggregate of 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity, to be allocated to up to five beneficiaries (up to 1,200 MTPA each) through global competitive bidding.
- Scheme duration: seven years from the date of award, including a two-year gestation period to set up facilities and five years of incentive disbursement.
- Open to both domestic and foreign manufacturers, reflecting the absence of existing sintered-magnet manufacturing capability in India at scale.
The REPM scheme is precisely the "in between" stage the commentary flags as under-addressed — India can mine rare earths and can (in principle) cut Chinese imports, but converting ore into sintered magnets requires the refining, alloying, and sintering capability this scheme is meant to incentivise, none of which exists domestically yet at commercial scale.
China's April 2025 Rare-Earth Export Licensing Controls
On 4 April 2025, China introduced export licensing requirements for seven medium and heavy rare-earth elements and related magnets, as part of its response to escalating US tariff actions. This exposed how concentrated global rare-earth refining and magnet capacity is in Chinese hands, irrespective of where the raw ore is mined.
Key Details
- The seven elements covered: scandium, yttrium, samarium, gadolinium, terbium, dysprosium, and lutetium, along with related compounds, metals, and finished magnets.
- China accounts for a dominant share of global rare-earth refining and sintered permanent-magnet production capacity, even though it does not hold a comparable share of raw rare-earth ore reserves globally.
- In FY 2024-25, India imported close to 54,000 tonnes of rare-earth permanent magnets, with roughly 93% sourced from China; even after the licensing curbs, China supplied around 88% of India's imports in the first half of FY 2026.
This episode is the direct trigger for India's current magnet mission, and it illustrates the commentary's core point — China's dominance is not primarily in rare-earth mining but in the refining and magnet-manufacturing stage, which is exactly the capability gap India's new schemes are trying to close.
- NCMM outlay: Rs 34,300 crore over FY 2024-25 to FY 2030-31 (Rs 16,300 crore budgetary + Rs 18,000 crore PSU investment); approved January 2025; Ministry of Mines.
- MMDR Amendment Act, 2023: in force from 17 August 2023; lists 24 critical and strategic minerals in Part D of the First Schedule.
- REPM Scheme: Rs 7,280 crore outlay (Rs 6,450 crore sales-linked incentive + Rs 750 crore capital subsidy); approved November 2025; target 6,000 MTPA capacity across up to five beneficiaries; Ministry of Heavy Industries.
- China's rare-earth export licensing controls: introduced 4 April 2025, covering seven elements (scandium, yttrium, samarium, gadolinium, terbium, dysprosium, lutetium).
- India's rare-earth magnet imports, FY 2024-25: ~54,000 tonnes, ~93% from China; still ~88% from China in H1 FY 2026 despite curbs.