Germany's ambitious offshore wind energy sector is actively seeking to reduce its heavy reliance on China for a critical component: rare earth magnets. In a strategic shift, German companies and government officials have initiated early-stage talks with India to explore its potential as a new manufacturing and supply hub for these essential materials.
Geopolitical Shifts Spark New Partnerships
The discussions gained momentum during a German delegation's visit to New Delhi in November 2025, led by Johann Saathoff, parliamentary state secretary to Germany's federal minister for economic cooperation and development. The central topic was potential collaboration on manufacturing rare earth magnets, a move driven by growing geopolitical risks and strained supply chains. China currently controls an estimated 90% of global processing capacity for these magnets, creating a precarious single-point dependency for Europe's clean energy transition.
"Germany is completely reliant on China for the supply of rare earth magnets. The offshore wind players are now looking at diversifying their supply chain and want to explore if India could meet their demand," revealed a source familiar with the talks. The German Offshore Wind Energy Foundation (Stiftung Offshore Windenergie) is even considering sponsoring a study to assess how India could cater to the sector's permanent magnet needs.
India's Strategic Position and Domestic Push
India presents a compelling alternative. The country boasts one of the world's largest rare earth reserves, estimated at about 6.9 million tons, primarily along its coastline. Recognizing the strategic opportunity, the Indian government announced a substantial ₹7,280-crore incentive package in late 2025 to establish a domestic rare earth magnet supply chain. The goal is to create a capacity of 6,000 metric tons by 2030, which is expected to surpass India's own projected demand of 4,000-5,000 tons, leaving room for exports.
This domestic push was accelerated by China's surprise export controls on rare earth magnets in April 2025, a move seen as retaliation against international trade tariffs. The controls disrupted global supplies for defense, electronics, and renewable energy sectors. India's plan includes setting up five magnet manufacturing facilities within two years, with sales-linked incentives to follow. Global and domestic firms like Lynas, Iluka, JSW, and Bharat Forge have shown interest in the scheme.
Why Magnets Are Crucial for the Wind Revolution
Rare earth permanent magnets, particularly those using neodymium-praseodymium (NdPr), are indispensable for modern offshore wind turbines due to their high efficiency and power density. Each offshore wind turbine requires up to 232 kg of NdPr per megawatt (MW). With Germany aiming to scale its offshore wind capacity from 9.2 GW in 2024 to 30 GW by 2030, and the European Union targeting 60 GW by 2030, the demand is colossal.
Industry estimates project that the EU will need roughly 13,000 tonnes of these magnets for wind turbines by 2030, soaring to nearly 70,000 tonnes by 2050. Aditya Pyasi, CEO of the Indian Wind Turbine Manufacturers Association (IWTMA), noted that while India's established onshore wind sector uses induction motors, rare earth magnets will be vital for its own offshore ambitions and for export. "Germany is good in technology, but India is more competitive in terms of skilled manpower and manufacturing," Pyasi stated.
India plans to develop 10 GW of offshore wind capacity—5 GW each off the coasts of Tamil Nadu and Gujarat. This domestic need, coupled with the export potential to Germany and Southeast Asia, positions India at the center of a changing global supply landscape. A report by the Council on Energy, Environment and Water (CEEW) estimates that China's share of global wind energy permanent magnet demand could fall to 19% by 2030 from 64% in 2023, signaling a significant market shift.
