India has approved a Rs 7,280-crore plan to boost domestic production of rare earth permanent magnets (REPMs), a key component for electric vehicles (EVs), wind turbines, electronics, defence, and medical equipment. The scheme will help India reduce its heavy reliance on imports, especially from China, which controls over 90% of global magnet production.
The seven-year initiative will create India’s first integrated REPM manufacturing facilities. The plan targets 6,000 Metric Tons per Year (MTPA) of magnets. The manufacturing process will cover everything domestically: transforming rare earth oxides like neodymium and praseodymium into metals, forming alloys, and producing finished magnets.
Rare earth magnets are extremely strong and have no real substitutes for high-performance applications. A mid-size EV requires 1–2 kg of these magnets, while a 3-MW offshore wind turbine uses about 600 kg. With India aiming for 30% EV penetration by 2030 and expanding renewable energy, domestic demand is expected to grow rapidly.
Despite having the world’s fifth-largest rare earth reserves, estimated at 6.9 million tonnes, India currently contributes only 1% to global production. Most resources are in southern states like Kerala, Tamil Nadu, and Andhra Pradesh, as well as Odisha. Smaller deposits exist in Rajasthan, Bihar, and Jharkhand. Extracting these minerals is challenging because they often contain thorium and uranium, requiring strict regulatory oversight and complex processing that generates hazardous waste.
The programme will be jointly overseen by the Department of Atomic Energy, Ministry of Mines, and NITI Aayog, and will include capital subsidies, production-linked incentives, and viability gap funding.
Experts say the scheme is a game-changer for India’s self-reliance. Amitabh Kant, former CEO of NITI Aayog, said it allows India to “set its own terms and build long-term technological strength at home.” By developing a local rare earth ecosystem, India can strengthen its EV and clean energy sectors while reducing geopolitical risks associated with China’s export controls.
This move marks a major step toward Atmanirbhar Bharat, ensuring India’s industries remain competitive and secure in the global push for electrification and sustainable energy.
