The government is planning to begin domestic production of rare earth permanent magnets by the end of the year in partnership with the private sector, informed union mines minister G. Kishan Reddy. The move forms part of a broader strategy to reduce reliance on imports of critical industrial materials. To accelerate this push, the government has approved a ₹7,300 crore manufacturing programme in November aimed at building a robust rare earth magnet ecosystem within the country.
Strategic Importance for EVs, Defence and Renewable Energy
Rare earth permanent magnets are essential components across high-growth sectors, including:
*Electric vehicles (EVs)
*Aerospace
*Defence systems
*Renewable energy equipment
As India ramps up domestic manufacturing in these industries, securing a stable supply of magnets has become a national priority.
Technology Development and Four-Plant Plan
According to the minister, the mining ministry, along with a state-run entity, has already developed the technology required to manufacture permanent magnets domestically. The government now plans to establish four critical mineral processing plants across four states, laying the foundation for a self-reliant supply chain. The announcement was made at an event organised by the Federation of Indian Chambers of Commerce & Industry (FICCI).
Leveraging India’s Rare Earth Reserves
India possesses the world’s third-largest rare earth reserves, estimated at 6.9 million tons, according to the United States Geological Survey (USGS). However, despite this resource advantage, the country currently mines only a small portion due to limited private-sector participation. By encouraging industry collaboration, the government aims to unlock these reserves and build downstream processing capabilities.
Rising Demand and Import Dependence
India’s consumption of rare earth permanent magnets is projected to double by 2030, driven by rapid electrification and industrial growth. At present, however, most of the demand is met through imports. China dominates nearly 90% of global rare earth magnet processing. When it restricted shipments last year, Indian automobile manufacturers faced significant supply disruptions, underscoring the strategic vulnerability.
Strengthening Supply Security and Industrial Growth
By launching domestic production, India seeks to strengthen supply security, support high-tech manufacturing, and reduce exposure to geopolitical risks. As reported by thehindubusinessline.com, if executed successfully, the initiative could position the country as a competitive player in the global critical minerals value chain while reinforcing its broader “Make in India” ambitions.
