The Indian government has approved a $815 million investment to boost local production of rare-earth magnets.

As demand for EVs, clean energy, and advanced electronics continues to rise, many countries are racing to diversify their rare-earth supply chains after years of heavy reliance on China. 

Under India’s new plan, five integrated manufacturing units will be selected, each capable of producing up to 1,200 tonnes per annum, with production expected to start within 2–3 years. 

India attempts to become self-reliant for rare-earth magnets

The government in New Delhi has formally approved a ₹7,280 crore ($815–816 million) program to support the domestic manufacturing of rare-earth permanent magnets (REPM).  

According to the Information and Broadcasting Minister, Ashwini Vaishnaw, the program will help build an integrated REPM supply chain that does the work of converting the rare-earth oxides into metals, then alloys, and finally finished magnets. 

The goal is to reach a production capacity of 6,000 metric tonnes per annum (MTPA), by establishing five manufacturing units, each with up to 1,200 MTPA capacity through global competitive bidding. The plan is set to run over seven years. There will first be a two-year gestation period to set up facilities, then five years of incentives to support production and sales. 

Major Indian industrial groups like Vedanta Group, JSW Group, and others have shown initial interest in the program. 

According to the government, once these plants are operational, India’s dependence on imported permanent magnets could drop to near zero. 

However, India’s domestic supply of rare-earth oxides such as neodymium-praseodymium, NdPr remains limited. Only a small portion of the required rare-earth oxide for magnets is currently produced domestically. Firms will likely need to source much of their raw materials from abroad or new mining expansions.

Export restrictions affecting supply chains 

India’s decision to increase local production of magnets is influenced by the disruption of global rare-earth supply chains due to export restrictions imposed by Beijing. 

Several countries have taken similar steps to increase domestic magnet production for the same reason of reducing dependence on China. Australia’s Lynas Rare Earths, for instance, has expanded its rare-earth processing in Malaysia. It recently started commercial production of separated dysprosium and is preparing to produce terbium next. 

Saudi Arabia entered the sector through a new joint venture between Ma’aden and the U.S.-based MP Materials. The goal is to build a full mine-to-magnet supply chain in the kingdom.

French companies Solvay and Carester are expanding oxide separation and magnet-material production in France and elsewhere in Europe, and the Steenkampskraal mine in South Africa restarted development after receiving new funding in 2025 to revive rare-earth production.

Rare-earth permanent magnets are critical components in a wide array of high-tech and green industries like electric vehicles (EVs), wind turbines, and other renewable energy equipment, consumer electronics, aerospace, defence, and more. 

Until now, government data shows that in fiscal year 2024–25, India imported 53,748 metric tonnes of rare-earth magnets. 

Aside from securing a safe supply of critical materials, investing in local manufacturing also supports the government’s goal of making the country more self-reliant under the Atmanirbhar Bharat policy.

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