India is building domestic rare earth magnet capacity as Shaktikanta Das highlights China’s 80–90% supply dominance and its risks for electronics manufacturing.
India is moving to build domestic capacity for rare-earth permanent magnets, a critical input for electronic hardware and automobile manufacturing, as the government seeks to reduce vulnerabilities arising from dependence on China.
Shaktikanta Das, Principal Secretary-2 to the Prime Minister, said the government responded to global supply-chain vulnerabilities by launching a major initiative to develop domestic rare-earth magnet capacity.
“The central government came out immediately thereafter with a major initiative to develop domestic capacity in rare earth permanent magnets,” Das said.
Highlighting the importance of these magnets to electronics manufacturing, he said, “Because that is one critical component on which automobile manufacturing, electronic hardware manufacturing, and so much other manufacturing depends.”
Das said China’s dominance of the rare-earth magnet ecosystem had exposed a major global supply-chain vulnerability. “China had imposed certain restrictions. It was a problem for almost the whole world, and because almost 80 to 90 per cent of rare earth magnet supply and that entire ecosystem originates in China,” he said.
The move is part of a broader effort to strengthen India’s control over strategically important manufacturing inputs. China’s Ministry of Commerce expanded rare-earth export controls in October 2025, covering specified permanent magnet materials and components, including samarium-cobalt magnets and certain neodymium magnets containing terbium or dysprosium, Reuters reported.
The controls also covered certain advanced semiconductor-related items and AI research with potential military applications.
For India’s electronics sector, domestic rare-earth magnet capacity could help address a critical supply-chain dependency exposed by China’s export restrictions.
