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The Indian cabinet has approved a rare-earth permanent magnet manufacturing program with an outlay of INR 72.8 bn (USD 815.7 mn) to cut dependence on imports of materials essential to electric vehicles, aerospace, defense, and renewable energy, Information Minister Ashwini Vaishnaw said in a press briefing. Domestic demand for these high-strength magnets is expected to double by 2030, yet India currently relies almost entirely on overseas suppliers, importing 53k metric tons in FY 25.
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The initiative will support new plants with a combined capacity of 6k metric tons annually, allocated to five companies through global competitive bidding each capped at 1.2k metric tons. The program will “practically reduce import dependence to zero” once facilities are operational, bolstering India’s supply-chain resilience in strategic sectors, Vaishnaw said.
Market reactions: Both public and private companies across the electronics, automotive, and steel sectors have expressed interest in the scheme. Incentives will be awarded through a transparent, competitive process, allowing winning bidders to choose plant locations.
The automobile industry welcomed the approval as a critical step. The program will spur investment in advanced materials and better position India in global EV and clean-energy value chains, Hindu reports, citing Vikrampati Singhania, President of the Automotive Component Manufacturers Association. Renault Group India CEO Stéphane Deblaise called the move “pivotal” to accelerate growth for automakers and suppliers as well as improve long-term competitiveness.
Contextualizing the supply squeeze: China’s dominance in the rare-earth supply chain has long exposed India to disruptions. Beijing has periodically tightened export controls on rare-earth elements, disrupting manufacturing, particularly in the automotive sector, where companies had to cut production targets due to the shortages. The government is promoting domestic manufacturing through policy initiatives while also bolstering supplies from other countries.
