India to Triple Investment in Rare Earth Magnet Manufacturing to Reduce Dependence on China
India is increasing its planned investment in rare earth magnet manufacturing to over Rs 7,000 crore to boost domestic production. The initiative aims to establish a local manufacturing ecosystem and reduce reliance on China, which currently dominates processing and export of rare earth minerals. The government plans subsidies and financial support to companies, targeting industries such as automotive, electronics, and defense.
India is significantly ramping up its incentives for rare earth magnet production, with a government-backed plan involving over Rs 7,000 crore aimed at enhancing local manufacturing capabilities. The initiative includes capital and operational subsidies to attract companies to build processing facilities domestically, thereby reducing the country's dependency on China, which controls over 60% of global rare earth production and more than 90% of processing capacity. The plan targets creating a complete value chain from extracting rare earth oxides (like neodymium-praseodymium) to producing sintered neodymium-iron-boron magnets that are vital for electric vehicles, wind turbines, electronics, and defense applications. This strategic move aligns with efforts to establish a National Critical Mineral Reserve and secure supply chains against disruptions. However, challenges remain due to China's restrictions on exports of critical equipment and technology needed for rare earth processing, potentially increasing costs and slowing India’s progress. The government’s scheme is expected to run for seven years, aiming to produce up to 6,000 tonnes annually, and reflects a larger geopolitical push to diversify away from Chinese supply dominance in critical minerals essential for modern technologies and national security.
