India Targets Domestic Production of Rare Earth Permanent Magnets by Year-End
Union Minister of Mines and Coal G Kishan Reddy emphasized the crucial importance of self-reliance on Thursday, announcing that India aims to commence domestic production of rare earth permanent magnets by the end of this year through strategic collaboration with private industry partners.
Strategic Significance of Critical Minerals
Reddy highlighted the profound strategic significance of critical minerals for India's economic advancement and geopolitical positioning. He called for coordinated national efforts to secure and strengthen supply chains, noting that these resources are fundamental to numerous high-priority sectors.
The minister revealed that the ministry, in partnership with a state-owned enterprise, has successfully developed the necessary technology to manufacture these magnets domestically. Furthermore, concrete plans are actively progressing to establish four specialized processing facilities for critical minerals across four different Indian states, marking a significant step toward reducing import dependency.
India's Vast Reserves and Current Challenges
According to data from the US Geological Survey, India possesses the world's third-largest reserves of rare earth elements, estimated at a substantial 6.9 million tonnes. Despite this immense natural wealth, extraction and processing activities remain notably limited. This underutilization is largely attributed to modest participation and investment from the private sector, a gap the new initiatives aim to bridge.
Reddy elaborated on the broad industrial reliance on these critical resources. He pointed out that sectors including solar power, electric mobility, defence, healthcare, agriculture, aerospace, electronics, medical imaging, and nuclear energy all depend fundamentally on minerals such as lithium, cobalt, nickel, and rare earth elements.
"Ensuring sufficient supplies of materials like copper presents a significant global challenge," Reddy added, noting that this issue extends beyond India as nations worldwide become increasingly dependent on these essential inputs.
Addressing Import Dependency and Global Concentration
The minister presented a stark statistic: India currently imports approximately 95% of its critical mineral requirements. He acknowledged that addressing this substantial vulnerability is absolutely essential for the country's sustainable development and security.
Reddy observed that the global value chain for these minerals remains heavily concentrated in a limited number of countries. "Some nations have taken control over them. Some countries have monopolized them. We will have to work together on such critical minerals, on such critical topics, at such critical times," he stated, framing the issue as one of significant geopolitical importance.
He described critical minerals as now featuring prominently on the global strategic agenda, presenting a period where India can emerge as a compelling and attractive destination within the global critical minerals ecosystem. Achieving this vision, he stressed, will require a collective national effort to position India as a competitive hub.
Government Initiatives and Future Projections
In support of this goal, the Union Budget 2026-27 has proposed the creation of dedicated rare earth corridors in the states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. These corridors are designed to support integrated activities including mining, processing, research, and the manufacturing of Rare Earth Permanent Magnets (REPMs).
In a major move last November (2025), the government approved a substantial Rs 7,280 crore scheme specifically for REPM manufacturing. The ambitious program aims to establish an integrated production capacity of 6,000 metric tonnes per annum. The financial package includes:
- Rs 6,450 crore allocated for sales-linked incentives over a five-year period.
- Rs 750 crore designated as capital support for establishing advanced production facilities.
The demand for rare earth permanent magnets within India is projected to double by the year 2030. Currently, the country relies predominantly on imports to meet its requirements, a situation the new production aims to rectify.
This dependency is particularly precarious given that China dominates nearly 90% of the global processing capacity for these magnets. China's decision to curtail exports last year created significant supply chain challenges for automobile manufacturers and other industries worldwide, underscoring the urgency of developing domestic capabilities.
Minister Reddy's announcement marks a pivotal step in India's strategy to secure its technological future, reduce external dependencies, and leverage its natural resources for economic growth and strategic autonomy.
