India is taking steps to enhance its domestic production of rare earth magnets, which are crucial for modern technology, including electric vehicles and smartphones. In November 2025, the Indian government approved a significant investment of 73 billion rupees ($800 million) to reduce its reliance on China, which currently dominates the market and supplies 80-90% of India’s magnets and related materials.
Despite having the world’s third-largest reserves of rare earth elements, India faces challenges in developing a robust manufacturing ecosystem. The focus will initially be on rare earth magnets to facilitate quicker self-sufficiency. The planned production capacity aims to reach 6,000 tons per year within seven years, amidst expectations of domestic demand doubling.
Experts caution that financial investment alone is insufficient. India lacks industry expertise compared to countries like Japan and Germany, which have long-established practices. Strategic partnerships for technology transfer and workforce development are crucial. Current domestic operations remain limited, with only one mine actively producing, emphasizing the need for expanded raw material sourcing.
While India seeks to augment its mining and processing capacity, concerns remain over reliance on imported raw materials needed for high-performance magnets. Competition from cheaper Chinese imports poses a further challenge, alongside the necessity of setting competitive pricing for domestically produced magnets. Overall, implementing this initiative represents a significant, albeit complex, step towards building a sustainable rare earth ecosystem in India.
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