Boosting domestic production, India is investing 73 billion to achieve rare earth magnet independence from China.
The Ministry of Finance has approved a ₹73 billion scheme for India to become a leading player in rare earth magnet production. This will reduce India’s dependence on China and foreign supply chains.
This is a sharp upgrade from the initial ₹13.45 billion proposal. With ₹65 billion earmarked for capital expenditure and ₹8 billion for operational costs, the plan offers 30–50% production cost subsidies for qualifying manufacturers investing at least ₹2 billion. The ambitious target is 6,000 metric tonnes of rare earth magnets annually by 2030, sufficient to meet projected domestic demand.
The initiative comes in response to China’s near-monopoly on rare earths, which controls up to 90% of processing and magnet production. Beijing’s export restrictions in April 2025 disrupted India’s EV and defense sectors, highlighting the country’s supply chain vulnerability.
At least five companies, including JSW, Mahindra, Sona Comstar, Midwest Advanced Materials, and IREL, are expected to participate, covering end-to-end processing from rare earth oxides to finished magnets. The scheme is aligned with India’s green energy and EV targets, supporting wind turbines, EV motors, and defense applications.
Beyond domestic benefits, the program reduces reliance on Chinese imports, opens avenues for global partnerships, and positions India as a strategic alternative supplier in the global rare earth market. Early production is expected by late 2025, with full-scale operations ramping up through 2030.
