Powering Up: India's Push for Rare Earth Magnet Production

Amid growing concerns over a looming global shortage of rare earth materials, the Indian government is preparing to launch an incentive scheme to boost domestic production of rare earth magnets, Heavy Industries Minister H. D. Kumaraswamy announced on June 24, 2025. The scheme is expected to be introduced within the next 15–20 days, with ongoing consultations to determine the scale and financial outlay.

“If the total incentive exceeds ₹1,000 crore, Union Cabinet approval will be required,” ministry officials stated. The move comes in response to China’s tightening of export controls on seven rare earth elements and related magnets, which now require detailed end-use declarations and assurances they will not be used for defense purposes or re-exported to the U.S. These new regulations have extended export clearance times to over 45 days, disrupting global supply chains.

In response, India is actively diversifying its sourcing by engaging with countries such as Japan and Vietnam. A Hyderabad-based company has committed to supply 500 tonnes of rare earth materials by the end of 2025. However, government officials estimate that domestic production of rare earth magnets could take up to two years to become operational.

These magnets are essential components in electric vehicles (EVs), hybrid vehicles, and select internal combustion engine (ICE) applications, making their reliable supply critical to India's clean mobility and manufacturing goals.

News by Rahul Yelligetti.