India Advances Towards Self-Sustenance in the Rare Earth Ecosystem

India is accelerating efforts to build a resilient rare earth value chain as recent export restrictions by China exposed vulnerabilities in domestic supply lines. With demand rising sharply in electric mobility, defence and electronics, policymakers and industry leaders are pushing for a unified strategy to reduce import dependence and strengthen national capabilities.

Strategic Importance of Rare Earth Magnets

Rare earth magnets such as NdFeB and Sm-Co are essential for electric vehicle motors, defence equipment and numerous electronic components. India holds an estimated 7 million tonnes of rare earth reserves and currently produces precursor oxides like Nd and Nd-Pr. Yet, domestic magnet manufacturing remains limited due to reliance on low-cost Chinese imports and technology gaps.

Supply Chain Risks and Rising Demand

China’s export control measures in 2025 demonstrated the risk of overdependence on a single supplier. Nearly all of India’s magnet requirements are imported, with China accounting for the majority share. Demand is set to triple by FY30 as EV adoption and renewable energy expansion accelerate. Bridging midstream and downstream gaps is therefore central to India’s EV30@30 goals and its broader China+1 strategy.

Key Bottlenecks in Localising Production

India’s monazite-based ores contain lower rare-earth concentrations and require stringent radiological safeguards, increasing processing complexity. Technological capabilities remain fragmented, with only early-stage progress in plant design and process optimisation. Regulatory clarity is evolving, particularly concerning private-sector participation under the oversight of IREL and the Department of Atomic Energy.

Exam Oriented Facts

• India has ~7 million tonnes of rare earth reserves.
• About 100% of rare earth magnets used domestically are imported.
• Demand is expected to rise from ~2 kiloton (FY25) to ~6 kiloton (FY30).
• China controls ~90% of global rare earth processing capacity.

The Path to Self-Reliance: Technology, Incentives and Recycling

A national panel for rare earths could unify research and accelerate commercial-scale breakthroughs in Nd metal and NdFeB magnet production. Incentive schemes modelled on ACC-PLI would support manufacturing investment, while streamlined clearances and assured raw material supply would reduce setup barriers. Building a recycling ecosystem for end-of-life magnet-containing components is equally crucial to developing a circular economy, cutting environmental impact and ensuring long-term resource security.