BUSINESS

Race for Rare Earths: Why India is Tripling Its Magnet Bet

India’s clean-tech future depends on securing the smallest yet most critical components: rare-earth magnets. Owning domestic magnet manufacturing protects growth, safeguards jobs, and ensures that the country’s green ambitions aren’t stalled by geopolitical uncertainties.

Why Rare Earth Magnets Matter

Rare-earth magnets, made from neodymium, iron, and boron, are the heart of electric vehicles, wind turbines, and advanced electronics. Without them:

An EV motor loses efficiency and performance.
A wind turbine blade is just metal, not energy-generating machinery.
Defence and high-tech sectors face supply vulnerabilities.

Global demand for rare-earth permanent magnets is soaring. According to the International Energy Agency (IEA), demand could double by 2030 as EVs and wind energy scale rapidly.

India’s Dependence on Imports

Currently, China dominates 80–90% of high-performance magnets, including 95% of heavy rare earths that prevent overheating—a critical factor for India’s climate.

In FY25, India imported over 53,000 tonnes of rare-earth magnets, with 90% sourced from China.
Export restrictions and regulatory hurdles from China highlighted India’s vulnerability in the supply chain.

India’s Domestic Magnet Manufacturing Push

To reduce import dependence, the Indian government is set to triple support for domestic magnet manufacturing, expanding incentives beyond Rs 7,000 crore over seven years. This is designed not as a subsidy, but as a strategic shield.

Key Initiatives:

IREL’s Permanent Magnet Plant in Visakhapatnam – Will supply critical sectors and establish domestic capabilities.
National Critical Mineral Mission – Secures mined feedstock, promotes recycling, and reduces reliance on foreign sources.
International Partnerships – Japanese firms like Toyotsu Rare Earths India and Proterial are exploring local manufacturing, leveraging their expertise in rare-earth supply chains.

India also has 6% of the world’s rare-earth reserves, mainly along the Odisha–Andhra Pradesh coast, giving the country a strong foundation for local production.

Benefits for India

Domestic magnet manufacturing will deliver wide-ranging advantages:

Stable EV costs: Electric two-wheelers and cars will be less affected by global politics.
Wind energy security: Turbine installations won’t be delayed due to import bottlenecks.
High-tech job creation: Engineering and precision manufacturing jobs will replace low-value assembly work.
Defence independence: Critical systems won’t face external supply chokepoints.
Recycling ecosystem: Policy supports recovery of up to 50% of magnet materials from retired EV motors, promoting a circular economy.

The Bigger Picture

Magnets may be small and invisible, but they are central to India’s industrial and technological independence. By tripling its investment in magnet manufacturing, India is taking control of the components that will drive the nation’s clean-energy, defence, and technology sectors for decades to come.