India Pushes to Build Its Own Rare Earth Magnet Industry to Cut Dependence on China
A senior official in the Prime Minister's Office, speaking at the Kautilya Economic Conclave 2026, said the government is building domestic capacity to make rare earth permanent magnets.
These magnets are a key part of cars (especially electric vehicles), electronic hardware and many other manufactured goods.
The official said the push came after China restricted rare earth exports, which caused problems for almost the whole world. About 80% to 90% of rare earth magnet supply and its full ecosystem is based in China.
China's Ministry of Commerce had expanded its rare earth export controls in October 2025. These covered more rare earth elements and magnet materials, such as samarium-cobalt magnets and certain neodymium magnets containing terbium or dysprosium, and parts made with them.
India's response includes the ₹7,280 crore Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets, approved by the Union Cabinet in November 2025.
Rare Earth Elements (REEs) and Strategic Importance
Rare Earth Elements (REEs) are a group of 17 metals with special magnetic, light-emitting and electrical properties. Tiny amounts of them make modern technology work: phone screens, electric vehicle motors, wind turbines, missiles and medical scanners. Despite the name, most of them are not truly rare in the earth's crust. What is hard is finding them in rich enough deposits and separating them from each other, which is costly, slow and polluting.
The official's remark that 80% to 90% of the rare earth magnet ecosystem sits in China reflects the concentration explained above. China's export controls showed how a single country's decisions can stop factories worldwide, which is why India is now trying to build the processing and magnet-making stages at home.
Rare Earth Permanent Magnets (REPM): What They Are and Why They Matter
A Rare Earth Permanent Magnet (REPM) is a very strong magnet made using rare earth metals, mainly neodymium. A "permanent" magnet keeps its magnetism on its own, without electricity, unlike an electromagnet. REPMs are the strongest permanent magnets available for commercial use. Because they are so strong for their size, they allow small, light and efficient motors, which is why they sit inside electric vehicles, wind turbines, phones, drones, missiles and many home appliances.
The "major initiative" mentioned by the official is this REPM scheme. China's export controls on neodymium magnets containing terbium or dysprosium, and on samarium-cobalt magnets, directly threatened Indian car and electronics makers, which is why building 6,000 tonnes of integrated domestic magnet capacity is now a priority.
Critical Minerals: Meaning, India's List and Global Supply Chains
Critical minerals are minerals that a country needs badly for its economy and security, but whose supply is at risk, for example because only a few countries produce or process them. They are used in batteries, solar panels, electric vehicles, electronics and defence equipment. Each country makes its own list based on its needs and risks.
Rare earth magnets are one of the clearest examples of critical mineral supply risk. The push for domestic magnet capacity is part of India's wider critical minerals strategy, which aims to secure every stage from mining to finished products.
- About 80% to 90% of rare earth magnet supply and its ecosystem is in China (as stated at the Kautilya Economic Conclave 2026)
- China expanded rare earth export controls in October 2025, covering samarium-cobalt magnets and neodymium magnets containing terbium or dysprosium
- REPM Scheme: ₹7,280 crore; 6,000 MTPA; approved 26 November 2025
- India's REPM imports in 2024-25: about 53,700 tonnes
- India's rare earth reserves: about 6.9 million tonnes (USGS)
- National Critical Mineral Mission: ₹16,300 crore + ₹18,000 crore (PSUs)