India Launches ₹72.8 Billion Push to Manufacture Rare Earth Permanent Magnets Domestically

India has approved a ₹72.8 billion (about $816 million) programme to develop large-scale manufacturing of rare earth permanent magnets, aiming to sharply reduce its reliance on imports for these strategically important materials. Permanent magnets-used extensively in electric vehicles, wind turbines, aerospace systems, defence equipment and advanced electronics-are currently sourced entirely from abroad, making India vulnerable to supply chain disruptions and price fluctuations.

The government highlighted that India's consumption of rare earth permanent magnets is projected to double by 2030. Despite this rising demand, the country imported 53,748 metric tons of these magnets in FY25. Information Minister Ashwini Vaishnaw said the new initiative would significantly strengthen domestic capabilities, eventually bringing import dependence “practically to zero” once the planned plants are operational.

Under the programme, the Ministry of Heavy Industries will support the creation of manufacturing facilities with a combined annual capacity of 6,000 metric tons.

This capacity will be distributed among five selected players through a global competitive bidding process, with each beneficiary eligible for allocations of up to 1,200 metric tons per year.

The move is expected to enhance India’s industrial resilience, promote self-reliance in critical technologies, and support the country’s clean energy and electric mobility transition.

₹72.8 billion for 6,000 metric-tonne annual permanent-magnet capacity across five bidder-selected players addresses one of the most strategically consequential supply-chain vulnerabilities in India's clean-energy-and-defence value chain. Rare-earth permanent magnets are critical inputs to EV motors, wind turbines, defence systems and industrial motors; 100 percent import dependence creates acute supply-security exposure.

The 53,748-metric-tonne FY25 import volume plus doubling-demand projection through 2030 captures the scale of the underlying supply-security challenge. Even at full 6,000-tonne domestic capacity, imports remain material; the announced programme is a first step in a much longer supply-chain build-out. Follow-on programmes covering upstream rare-earth mining, processing and refining will likely be needed.

For EV manufacturers, wind developers, defence contractors, financial institutions and technology providers with rare-earth-value-chain exposure, Cognitud's supply chain and operations, sustainability due diligence and market intelligence teams help clients evaluate permanent-magnet-programme-linked opportunities, structure long-term commercial arrangements aligned with supply-security priorities, and prepare disclosures aligned with BRSR, ISSB and jurisdictional critical-minerals frameworks.