Significantly, India is launching an ambitious initiative to reduce its reliance on imports for assembly of rare earth magnets. These magnets are essential for emerging technologies, including electric vehicles and renewable energy systems. India also has the world’s third-largest rare earth reserves, at nearly 8% of the global total. The country hopes to leverage these resources to boost domestic production capacity. India is consuming about 7,000 tonnes of magnets annually. The country relies on overseas supplies for 80-90% of its needs, primarily from China, which currently controls more than 90% of global rare earth processing.
That’s because the country’s rare earth reserves mostly flourish in coastal sands. These invaluable repositories of folk culture are located in multiple states such as Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra, and Gujarat. India can take a huge advantage from its regional spread. If it does, it will really be able to leverage its natural prosperity and create a fulfilling, self-sustaining supply chain.
Meanwhile, India is quietly shoring up its own position in the rare earth sector. It has set aside 73 billion rupees, roughly $800 million, to build up its own rare earth magnet industry. As seen in November 2025 above, officials approved a radical new blueprint. It aims for a domestic production capacity of 6,000 tonnes of permanent magnets annually within the next seven years. Selected manufacturers will be awarded capital and sales-linked incentives to spur manufacturing here at home.
According to Rajnish Gupta, a leading industry expert and thought leader, this was a key first step. He stated, “The hope is that Indian players will continue to put in their entrepreneurial energy and get the ecosystem going.”
Despite these optimistic projections, challenges remain. In fact, India has very little commercial-scale experience in producing rare earth magnets. Today, the only active mine in Andhra Pradesh is owned by the Jindal Group. That begs the question of whether the country can actually stand up production fast enough.
Neha Mukherjee, as industry analyst, underscored the urgency of scaling production capacity. “If we do not scale capacity, the problem doesn’t get solved. We’ll still be dependent on China and China will scale,” she warned.
To further bolster its efforts, India inaugurated a facility at the Bhabha Atomic Research Centre in 2023 aimed at enhancing its capabilities in rare earth processing. Additionally, a plant backed by both public and private partners is set to produce 5,000 tonnes of magnets annually by 2030.
As India embarks on its own ambitious trajectory, it is running into logistical challenges. According to the most recent reports IREL, the state miner, was issued a directive as far back as June 2025. Under protectionism, they need to ban rare earth exports and sell to domestic customers before foreign customers. This decision is another step in recognizing the need to have a reliable supply chain for our local industries.
Dr. PV Sunder Raju, a leading expert in the niche field, raised doubts that financial investment would be sufficient. “It’s not possible to just give 73 billion rupees and expect a product without a strong background in research and development,” he cautioned.
India has major obstacles to overcome to develop a robust rare earth magnet industry. This scenario underscores the challenges in moving away from reliance on imported products to achieving sustainability. This major investment by the federal government demonstrates a firm willingness to finally establish domestic capabilities. Experts warn that strategic planning and sustained innovation will be needed to realize that success.
India’s path to becoming an industry leader in the rare earth magnet space is only starting. How well the nation is able to meet these challenges will determine the nation’s future. Success will be measured by creating a real foothold in the lucrative global market and cutting down on our dependence on foreign imports.