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Centre to Boost Rare Earth Magnet Production with Technology for Private Factories: Kishan Reddy

Centre to Boost Rare Earth Magnet Production with Technology for Private Factories: Kishan Reddy

India’s Strategic Move to Boost Rare Earth Magnets Production

India is taking significant steps to reduce its dependence on foreign sources for rare earth magnets, a critical component in various industries ranging from consumer electronics to defense and space technology. The Union Minister for Coal and Mines, G Kishan Reddy, has highlighted the government’s efforts to establish domestic production capabilities.

A Shift from Dependence on China

Historically, India relied entirely on China for permanent magnets made from rare earth elements. However, recent developments have prompted a shift in strategy. China has stopped supplying these materials, prompting the Indian government to focus on self-reliance. According to Kishan Reddy, the Ministry of Mines has developed a processing unit in Hyderabad that can produce permanent magnets. This initiative aims to transfer the necessary technology to private factories within three to four months.

To encourage this transition, the government has introduced several Production Linked Incentive (PLI) schemes. These programs are designed to support the growth of domestic manufacturing and ensure that India can meet its growing demand for rare earth magnets.

Global Supply Chain Challenges

The global supply chain for rare earth elements has faced disruptions, especially after China imposed export controls on certain rare earth-related items in early April. This move led to a shortage across the world, including in India. The Indian government has been in communication with Chinese authorities to seek predictability in the supply of these essential materials.

China’s dominance in the rare earth market is significant, as it controls over 90% of the world’s magnet production capacity. This concentration poses risks for industries worldwide, particularly those reliant on these materials for their operations. From automotive manufacturing to clean energy systems, the need for stable supply chains has never been more pressing.

National Critical Mineral Mission

In response to these challenges, the Indian government has launched the National Critical Mineral Mission (NCMM). Announced by Finance Minister Nirmala Sitharaman in the Union Budget for 2024-25, the mission received approval from the Union Cabinet in January 2025. With an allocated expenditure of Rs 16,300 crore and an expected investment of Rs 18,000 crore by Public Sector Undertakings, the NCMM aims to strengthen India’s position in the global rare earth market.

The mission also includes a budget of Rs 1,345 crore to incentivize the production of rare earth magnets. This funding is crucial for building domestic capacity and mitigating the impact of global supply shortages.

Strategic Collaborations and Future Outlook

Prime Minister Narendra Modi has emphasized the importance of developing a robust domestic industry for rare earth magnets. During his recent visits to five countries, discussions were held on enhancing cooperation in this sector. These collaborations aim to diversify supply sources and reduce dependency on any single country.

India’s approach to securing its supply of rare earth elements involves not only technological innovation but also strategic partnerships. By investing in research and development, and fostering collaboration between public and private sectors, India is positioning itself to become a key player in the global rare earth market.

Conclusion

India’s efforts to boost rare earth magnets production reflect a broader strategy to enhance economic resilience and national security. As the country works to build domestic capacity, it is also seeking to diversify its supply chains and reduce vulnerabilities in the global market. With the right policies and investments, India has the potential to emerge as a major producer of rare earth magnets, ensuring a stable supply for its industries and contributing to global efforts in sustainable development.