Rare Earth Or Rare Ingenuity? India Remains Between The Two

With China firmly controlling rare earth exports, India confronts a critical moment in its technological trajectory. The challenge is no longer limited to mineral access; it lies in innovation itself. The key test is whether Indian startups, scientists, and policymakers can reduce reliance on rare earths through magnet-free motor designs and advanced materials development.

Following the successful closure of the Electronics Component Manufacturing Scheme application window on September 30, 2025, Union Minister for Electronics and IT Ashwini Vaishnaw stated that India’s electronics manufacturing sector faces no bottlenecks in the domestic supply of rare earth minerals. It was quite a claim amid the buzz, given that rare earth vulnerabilities have dominated industry discussions throughout the year..

Over the last four decades, China has built near-total dominance in rare earth processing and magnet manufacturing through abundant resources, state-backed investment, and vertical integration. From early mining in the 1980s to full control of refining and magnet production by the 2000s, China’s coordinated policies, low costs, and industrial clustering created global dependency. Export curbs in 2010 triggered geopolitical alarm, while recent export licensing has revived concerns about the supply chain. Today, China controls an estimated 70-95% of global rare earth processing, prompting diversification drives in the US, EU, Japan, Australia, and India.

Back in April 2025, when China added a new chapter to its tightening of rare earth exports, India’s electronics, electric vehicle (EV), and defence sectors felt the pinch, exposing vulnerabilities in critical supply chains.

India’s rare earth roadmap: Between sovereignty and supply chains

India had recognised the issue much earlier, elevating rare earths from a materials concern to a national security and technology priority. As Principal Scientific Adviser to the government of India, Ajay Kumar Sood emphasised, the national goal is “to make the country self-sufficient or Aatmanirbhar in this critical area.”

Sood explained that while rare earth elements “are not actually rare,” the challenge lies in their “extraction, which is highly technology driven.” To address this, India Rare Earths Limited (IREL), operating under the Department of Atomic Energy, has taken the lead in extraction and processing. IREL “extracts rare earth oxides from monazite sands, a process that has been ongoing for many years.”

Historically, India’s focus had been on thorium and uranium extraction, but “now rare earths have become equally important.” According to Sood, IREL has developed the “full capability to extract both light and heavy rare earth oxides, including those required for making rare earth permanent magnets such as neodymium and praseodymium.” India currently produces around 1500 tons of rare earth oxides annually, marking a crucial step toward domestic self-reliance.

Key components of India’s rare earth strategy include:

• Developing a complete technology chain. From oxide extraction to metal conversion and alloying with elements like iron and boron to produce rare earth magnets. “This complete technology chain has now been developed domestically,” Sood noted, adding that several Indian companies are preparing to manufacture magnets using indigenously sourced materials.

• Investing in rare-earth-free permanent magnets, which do not use rare earth elements but can still achieve high magnetisation suitable for various applications, including automobiles. These magnets, though slightly larger, are functional and cost-effective alternatives that help reduce import dependence.

Highlighting these initiatives, Sood concluded, “The effort is well underway to make India technologically self-reliant and globally competitive in this strategically important field.”

Now, let us examine India’s policy framework in this regard. The strategy has shifted from restrictive atomic-era controls to a forward-looking industrial policy. In 1962, the Atomic Energy Act kept thorium- and monazite-rich sands under state control, ensuring security but stifling private exploration.

Reforms accelerated with the Mines and Minerals (Development and Regulation) Amendment Act, 2023, which streamlined auctions for 24 strategic minerals and opened exploration licences for 29 others, inviting private and foreign investment. The Geological Survey of India (GSI) and Atomic Minerals Directorate (AMD) now have 195 exploration projects underway, with 227 more planned for FY 2025-26.

A milestone came this year, when the National Critical Minerals Mission (NCMM) was launched in January 2025 with a ₹163 billion outlay. It aims to unify exploration, recycling, research, and industry collaboration. It targets 1200 exploration projects, ₹15 billion in recycling incentives and 1000 patents by FY 2030-31, with strong R&D support through the National Mineral Exploration Trust.

On the manufacturing front, a ₹73 billion scheme for rare earth magnets offering up to 50% cost subsidies seeks to produce 6000 metric tonnes annually by 2030. Complementary tariff exemptions on critical inputs and plans for a national stockpile underscore India’s push to build a secure and self-reliant critical minerals ecosystem.

At present, India imports around 80% of its rare earth elements from China, prompting the creation of the NCMS and efforts to diversify to countries such as Kazakhstan. As Suraj Rengarajan, Managing Director of Applied Materials’ Semiconductor Products Group, notes, “Every motor, for example, needs neodymium (a rare earth metal), and obtaining that is becoming more critical and increasingly difficult.”

Here, one question remains unanswered: Is the government merely fortifying access to raw materials, or genuinely pursuing alternatives that could reduce dependence altogether?

So far, most policy attention has centred on supply-chain resilience, new exploration blocks, magnet manufacturing incentives, and recycling schemes. These are necessary moves, but they remain defensive. They aim to secure continuity, not transformation. The larger challenge and opportunity lie in developing technologies and materials that can replace rare earths in electric vehicles, wind turbines, and electronics.

Globally, research into alternatives is accelerating. Toyota and Hitachi have made progress on heavy rare-earth-free magnet designs, while the US and EU laboratories are exploring iron–nitride and aluminium-nickel-cobalt alloys. According to the US Department of Energy, “substitution and recycling together could reduce global dependence on rare earths by up to 25% by 2040.” Yet, India’s industrial and R&D ecosystem remains underprepared for such innovation-led diversification.

Domestic R&D expenditure accounts for only 0.7% of GDP, one of the lowest rates among major economies (UNESCO, 2024). Most Indian electric motor manufacturers still rely on imported neodymium-iron-boron magnets, with no large-scale substitute technology under commercialisation. Even within the Production Linked Incentive (PLI) schemes for electronics and EVs, no dedicated track exists for material substitution research or magnet-free motor innovation—areas where global players like Advanced Electric Machines (UK) and Niron Magnetics (US) are already scaling up.

A 2024 report by the Council on Energy, Environment, and Water (CEEW) argues that India’s current approach resembles a resource-security model, not a technology-sovereignty strategy. Securing ores and refining capacity may reduce vulnerability to Chinese supply shocks, but without investment in fundamental materials science, the dependency simply moves upstream.

India’s next step, therefore, must go beyond mining licences and magnet plants. It requires strategic R&D funding, university-industry collaboration, and incentives for research on rare-earth-free motors and semiconductors. True resilience will come not just from controlling the supply, but from making the supply optional.

A pathway of freedom from the rare earth magnet

That shift is already beginning to take shape on the ground. Across India’s tech hubs, from Bengaluru and Chennai to Pune, homegrown innovators and startups are quietly reimagining motor design. Moving away from the policy complications of rare earth procurement, they are asking a simple question: If we cannot reliably buy those magnets, why not build motors that don’t need them?

Using ferrite magnets and combinations of aluminium, copper, and steel, several ventures are achieving magnetic performance comparable to that of neodymium-based systems. These early experiments signal a turn, one in which India’s path to rare earth resilience may run not only through mines and factories, but also through labs and startups that make rare earth elements less essential to begin with.

Instead of importing neodymium magnets, the new generation of rare earth-free motors comes with the same magnetic power. “ We are not chasing rare materials anymore,” says Bhaktha Keshavachar, Founder and CEO of Bengaluru-based startup Chara Technologies.

Chara’s architecture replaces rare earth magnets with rotors and software-controlled magnetic fields. Their synchronous reluctance motors are designed for two-wheelers, three-wheelers, and small commercial vehicles, with the most substantial traction in three-wheelers. Their applications are expanding to farm loaders, forklifts, and campus vehicles, supported by a modular 48-400V platform where only the shaft and mounting details differ.

The company has raised `520 million in funding and is scaling production from 20,000 to 100,000 electric three-wheelers, loaders, and other light commercial vehicles per year. “Once you crack the design, the applications are endless,” he added.

On innovation, Chara emphasised that ferrite magnets are locally feasible: “The challenge is not making ferrite magnets; they are established in India, but designing efficient motors around them.” Pilot programmes are underway with OEMs, validating performance in cost-sensitive segments, with adoption expected over five to ten years.

Meanwhile, in Pune, Conifer Motors is refining iron-based ferrite magnets, which is a more accessible material made from iron oxide that has been manufactured in India for decades. With a proprietary stator design, Conifer has increased torque output to levels comparable to those of rare earth motors. “By rethinking the motor shape and not materials, we can match performance and control output performance”, said the Conifer team.

Conifer, based in Sunnyvale, California, US, with a manufacturing facility in Pune, is developing rare-earth-free motors and powertrains for mobility and industrial applications. “We build motors for two-wheelers, scooters, small EVs, as well as stationary products like fans, pumps, and conveyor belts,” the team said. Their in-wheel powertrain for mobility applications boosts range by up to 30%, reduces weight and size by 15%, and increases continuous torque, all without using rare earth magnets. For stationary motors, efficiency reaches IE5 standards.

Besides startups, several Indian companies are now turning to rare-earth-free technologies. Sterling E-Mobility has partnered with UK-based Advanced Electric Machines (AEM) to locally produce magnet-free traction motors utilising AEM’s high-density reluctance motor (HDRM) platform, which eliminates the use of rare earths while maintaining torque and ensuring recyclability. Pilot production is underway in Faridabad.

Ola Electric, in October 2025, became India’s first two-wheeler OEM to receive AIS-041 certification for a rare-earth-free ferrite motor, available in 7kW and 11kW variants. Tata Elxsi’s ferrite-based motor, first revealed in 2023, could follow once commercial scaling begins.

Final thoughts

The rare earth challenge has become a test of industrial strategy, innovation, and technological foresight. India’s approach so far, focused on exploration, magnet manufacturing incentives, and critical mineral missions, has laid the foundation for resilience. However, true independence seems to depend on how effectively the country channels R&D funding, startup innovation, and circular economy technologies, such as recycling and material substitution. As Applied Materials’ Rengarajan points out, breakthroughs in recovering materials from electronic waste and improving processing efficiency can ease global supply pressures and lower strategic vulnerabilities.

Globally, the path to de-risking remains gradual: immediate efforts will focus on stockpiling and emergency sourcing, followed by mid-term investments in refineries and magnet plants, and finally, long-term diversification of supply chains. However, even by 2040, parity with China’s integrated rare earth ecosystem may remain elusive. For India, thus, the opportunity lies in bypassing China’s model altogether. We can do this through rare-earth-free technologies, sustainable design, and indigenous innovation that make the supply itself optional.

Shubha Mitra, Assistant Editor at EFY, is keenly interested in policies and developments shaping the electronics business.

Vidushi Saxena is a journalist at EFY.

Janarthana Krishna Venkatesan worked as a journalist at EFY until recently.