India will build rare earth corridors across mineral-rich states to boost domestic magnet production for high-technology sectors. Under the Union Budget 2026-27, the government announced support for these corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu. These corridors will integrate mining, processing, research and manufacturing of rare earth materials.
Enhancing Technology and Self-Reliance
The initiatives aim to reduce India’s heavy reliance on imported permanent magnets, which are crucial for phones, electric vehicles (EVs), defence and space equipment. By enhancing local production, India will secure supply chains that have long depended on foreign sources. As reported by the Economic Times, industry leaders say dedicated rare earth corridors will accelerate new technology development for magnet manufacturing and attract investment in processing facilities across states.
Customs Duty Exemptions to Boost Processing
The government also announced customs duty exemptions on capital goods required for processing critical minerals. This policy covers machinery used in lithium-ion cells, battery storage systems and related technologies. These exemptions aim to lower upfront costs and encourage private players to expand operations within India.
Strategic Scheme for Magnet Manufacturing
Earlier, the union cabinet approved a scheme to promote manufacturing of sintered rare earth permanent magnets with a financial outlay of ₹7,280 crore, targeting the establishment of 6,000 metric tons per annum of integrated manufacturing capacity. This scheme will build facilities that convert rare earth oxides into finished, high-performance magnets.
Reducing Import Dependence and Supporting Net Zero Goals
India currently imports most of its rare earth magnets. With these measures, the government expects to reduce dependence on imports, create jobs, and strengthen supply chains vital for EVs, renewable energy, aviation, electronics and defence sectors. The expanded domestic capacity aligns with India’s broader goal of achieving Net Zero emissions by 2070.
