New Delhi [India], August 14 : India is actively engaging with China to ensure uninterrupted access to rare earth materials, crucial for various industries, including electric vehicles, wind turbines and defence, a senior government official confirmed.
India is negotiating with China for the procurement of permanent magnets made from rare earth minerals. The government is also exploring alternative supply channels and domestic sources to reduce dependence on China.
"We are also finding ways and means by which the supply chain does not get impacted. Efforts are on," the official said.
For context, early this April, China announced a decision to implement export controls on certain rare earth-related items, pushing a supply shortage across the world, including India. Export controls imposed by China have raised concerns about supply chain vulnerabilities, particularly in critical sectors like defence and electronics.
India aims to diversify its rare earth supply through a combination of imports, domestic mining and international partnerships. The government is investing in research and development to improve domestic refining and processing capabilities. India is engaging in diplomatic efforts to secure stable and affordable access to rare earth materials, while also promoting cooperation with like-minded countries.
The central government has earmarked Rs 1,345 crore to incentivise rare earth magnets production in India. This was informed by Kamran Rizvi, Secretary in the Ministry of Heavy Industry, during a function in New Delhi. He added that the scheme will provide end-to-end support for the conversion of rare earth oxides into magnets. The subsidy will facilitate investment for establishing processing facilities for companies to convert rare earth oxides into magnets.
The government is considering introducing a PLI scheme specifically for rare earth magnets and critical mineral recycling to boost domestic production.
India is working with countries like Australia, the US and Vietnam to strengthen access to rare earth elements through initiatives like the India-US Critical Minerals Partnership and QUAD. The government is collaborating with Indian Rare Earths Ltd to accelerate domestic resource development and reduce reliance on imports.
Initiatives are underway to promote the recycling of critical minerals and reform mining regulations to encourage private sector participation.
China's overwhelming control of global rare earth processing - commanding over 90 per cent of the world's magnet production capacity - has created significant vulnerabilities for industries worldwide. These materials are critical across multiple sectors, including automobiles, home appliances, and clean energy systems. Beyond China, there are only a few alternative suppliers of critical minerals.
The Union Cabinet in January 2025 approved the launch of the National Critical Mineral Mission (NCMM) with an expenditure of Rs 16,300 crore and an expected investment of Rs 18,000 crore by Public Sector Undertakings.
Recently, Union Minister for Coal and Mines G Kishan Reddy said the central government is actively encouraging private companies to mine and explore critical minerals overseas and bring them back into the country to serve the needs of the domestic industry.
The rare earth materials have become crucial to industries such as electronics, automotive, construction, and machinery.
India's total imports of rare earth elements and related compounds have averaged around USD 33 million annually over the last four years, according to an SBI report.
In the current financial year (FY25), rare earth imports stood at USD 31.9 million. Meanwhile, imports of rare earth magnets have been significantly higher, averaging USD 249 million per year over the same period.
In FY25, magnet imports rose to USD 291 million, the highest in the last four years.
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