India to Begin Rare‑Earth Magnet Manufacturing to Offset China

• Magnet Production Soon: India to start rare earth magnet output in 3–4 months.
• Big Investment: Govt. plans ₹3,500–₹5,000 Cr in magnet facilities.
• Less China Reliance: Move to cut dependence on China’s 90% market share.

India is set to kickstart domestic production of rare earth magnets within the next three to four months to reduce dependence on Chinese exports amid tightening global supply controls. These magnets are essential in electric vehicles, defence systems, wind turbines, smartphones, and space technologies.

A government-backed facility under the Ministry of Mines has already established an advanced magnet processing unit. Now, the focus shifts to scaling production through private sector involvement. Technology will be transferred to domestic manufacturers to enhance output and ensure supply chain stability.

To support this initiative, the Centre is preparing to invest between ₹3,500 crore and ₹5,000 crore under a new Production Linked Incentive (PLI) scheme. This funding aims to establish robust rare earth processing and magnet production units across the country. IREL (India) Ltd., the public sector enterprise overseeing this strategy, has recently paused its export arrangement with Japan, redirecting resources to meet India’s growing domestic demand.

Also Read: Mahindra, Minda Plan Local Magnet Production in India: Sources

This strategic pivot is in response to China’s near-monopoly over rare earth materials—holding around 90% of global market share. Previous geopolitical tensions, including U.S.–China trade disputes, exposed the vulnerability of global supply chains, causing disruptions that heavily impacted India’s automotive and electronics sectors.

India's move is aligned with the broader global trend of diversifying critical mineral sourcing. With this effort, the government aims to bolster local manufacturing, increase self-reliance in strategic materials, and build long-term supply chain resilience to support high-growth industries.