Seeking Pole Position In Rare Earth Magnet Sector, India Plans Rs 3,500 Cr To Rs 5,000 Cr Scheme
This strategic initiative responds to China's recent decision in April 2025 to tighten export rules on rare earth materials and magnet products, disrupting global supply chains
India is poised to launch a substantial scheme valued between Rs 3,500 crore and Rs 5,000 crore, aimed at significantly boosting domestic production of rare earth minerals and the essential magnets derived from them, according to reports. This strategic initiative responds to China's recent decision in April 2025 to tighten export rules on rare earth materials and magnet products, which has disrupted global supply chains. These new restrictions have caused bottlenecks in vital sectors in India, the US, and Europe, particularly affecting the automotive and technology industries that heavily depend on these specialised magnets.
Despite possessing an estimated 6.9 million metric tonnes of rare earth reserves, ranking fifth globally, India has historically lacked a strong manufacturing base for rare earth magnets. Data from the fiscal year ending March 2025 underscores this dependency, with India importing 53,748 metric tonnes of these magnets, mainly from China. This heavy reliance has become a strategic vulnerability, particularly as Chinese rare earth product exports dropped by 61 per cent in May 2025 compared to the same month last year, hitting a five-year low.
In addition to financial incentives, the government is considering other supportive measures, including potential tariff exemptions for machinery used in rare earth processing and magnet manufacturing. Regulatory adjustments under the Mines and Minerals (Development and Regulation) Act are also being explored to streamline the process for domestic production.
This move follows a comprehensive ministerial-level assessment that highlighted the urgent need for India to secure alternative supply sources for these crucial materials. Indian automobile manufacturers, facing potential production cuts by July due to the supply crunch, have been vocal in urging the government for timely support. The long-term goal is clear: to establish India as a significant rare earth magnet manufacturing hub and reduce China's dominance in this critical segment of the global supply chain.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
20 minutes ago
- Economic Times
Tata Motors working with govt, looking alternate sources for magnets: Chandrasekaran
Mumbai: Tata Motors is working with the government and is also taking steps to procure magnets from alternate sources in the wake of China restricting exports of rare earth elements, company Chairman N Chandrasekaran told its shareholders on Friday. Responding to queries from shareholders on the impact of China's move to restrict exports of rare earth elements and shortage of magnets, he said, "As of now, this is not a concern, but this is something that we are watching very carefully." "As of now, we are okay. We are not facing are able to source the magnets that we need, and also we have plans for having the right level of inventory. We are working with the government. Also, we are working on sourcing from alternate sources," Chandrasekaran noted. China's restrictions on the export of rare earth elements and related magnets are affecting the domestic auto and white goods sectors. The automobile industry had sought government support in expediting approvals from the Chinese government for importing rare earth magnets used in various applications, including passenger cars. To another query on the impact of the ongoing Iran-Israel war on the company's business, he said, "It is very difficult to answer what will be a war kind of situation look like." However, he said Tata Motors group's three firms -- commercial vehicle, passenger vehicles and JLR -- have a very strong platform. "They will be able to tide over any of these geopolitical issues in the short term but are completely ready and poised for excellent growth and leverage the opportunity that this industry has to offer," Chandrsekaran asserted. Earlier in opening address, he said that going forward, volatility will continue to mark economic cycles -- from widespread geopolitical conflicts, military escalations, the redrawing of supply chains and tariff regimes, to AI and energy transition. Nowhere are all these disruptions visible more than in the automotive sector. "Given the enormous amount of work we have done over the past few years -- from simplifying the businesses to making big strategic bets to strengthening our financial position -- our businesses are structured to not just handle this environment, but to thrive," he asserted. Responding to a query on passenger vehicle business expansion in international markets, he said, "This is something that we are always in discussions but we are waiting for the right geopolitical environment to be able to launch but we are getting prepared." To another query on the completion of demerger of Tata Motors' commercial and passenger vehicle verticals into separate entities, Chandrasekaran said, "We think the demerger will happen in the last quarter of this year. "First, the PV company will list and then the CV company will list a couple of months later. It will happen, in our estimate, sometime around October-November-December quarter."
Economic Times
20 minutes ago
- Economic Times
Magnets in limbo: No rare earth nod yet from China for Indian auto suppliers
No Indian auto component or vehicle manufacturer has received approval from the Chinese government to procure rare earth magnets so far, Times of India reported citing sources. Despite efforts by Indian officials to intervene, the sources said there is "no clarity as yet" on when a meeting with Chinese representatives might happen. The applications for sourcing magnets were submitted primarily by auto component makers who manufacture complete, high-tech assemblies. These include speedometers, electric motors, e-axles, electric water pumps, automatic transmission kits, speakers, sensors, and ignition coils used in engines. Among the companies that have applied are Uno Minda, Bosch, Mareli, TVS Group, Motherson Sumi, and Sona Comstar. Economic Times reported this week that the number of India-based firms awaiting approval from China's ministry of commerce to import rare earth magnets has nearly doubled—from 11 two weeks ago to 21 now. This list includes Bosch India, Marelli Powertrain India, Mahle Electric Drives India, TVS Motor, and Uno Minda. Sona Comstar, whose earlier application was rejected due to procedural issues, has reapplied and is now among the 21 companies awaiting clearance, a senior industry executive told ET.'There were no approvals so far, according to the latest assessment we carried through interactions with industry representatives,' one source told TOI. 'The situation is grave, and there is now massive uncertainty regarding manufacturing schedules and factory output.' The request for a meeting with Chinese representatives is being followed up not only by leading industry bodies such as the Auto Component Manufacturers Association (Acma) and Society of Indian Automobile Manufacturers (Siam), but also by government ministries including heavy industries, external affairs, and commerce. Senior officials from major automobile companies such as Maruti Suzuki, Mahindra & Mahindra, Tata Motors, Bajaj Auto, and TVS are also involved in pursuing the matter with the government and diplomatic this week, the auto industry held a meeting with top officials at the Ministry of Heavy Industries as the government examined possible solutions to the crisis. 'However, not much headway was made so far,' an official source told the executives said that Ernst & Young has been brought on board by the ministry to assist with the issue. During the meeting, officials also reviewed the current preparedness of some Indian companies that are working in the field of magnet urged local magnet producers to provide a firm supply timeline, if at all possible, stating that uninterrupted production lines depend on timely procurement of components. According to the report, both Acma and Siam have drawn up a list of delegates they hope to send to China if the Indian government is able to facilitate such a restrictions were formally issued through a notification on April 4 this year. The new rules apply to medium and heavy rare earth metals, their alloys, magnets, and related products under the country's export permit prevent diversion of these materials to defence and weapons production, China now requires exporters to secure a licence. This licence depends on an End User Certificate (EUC), which must be approved first by India's Directorate General of Foreign Trade (DGFT) and the Ministry of External Affairs, and then also endorsed by the Chinese Embassy in after these steps are completed can the EUC be sent to China for the final stages of approval—first by the provincial government where the exporting company is located, and then by China's Ministry of Commerce. Rare earth magnets are critical components used in permanent magnet synchronous motors (PMSMs), which are widely applied in electric vehicles because of their compact size, high torque, and energy efficiency. Hybrid vehicles also rely on these magnets for efficient propulsion systems. While parts manufacturers based in Europe have recently received approval from Chinese authorities to source rare earth magnets, their Indian counterparts—despite being part of the same multinational corporations—are still waiting for the go-ahead from Beijing. According to experts, this delay is worsened by the strained political and commercial relationship between India and companies have been attempting to build local capabilities to reduce reliance on imported rare earth materials, but experts say this effort remains extremely challenging and is unlikely to provide immediate relief. (with ToI inputs)
New Indian Express
25 minutes ago
- New Indian Express
54 institutions from India make it to QS World University rankings, IIT Delhi highest at 123rd spot
NEW DELHI: Prime Minister Narendra Modi has lauded the performance of Indian educational institutions in the World University 2026 Rankings, which were made public on Thursday. In a post on X, the PM said, 'The QS World University Rankings bring great news for our education sector. Our government is committed to furthering research and innovation ecosystems for the benefit of India's youth.' India is the fourth most represented in the list with only the United States, United Kingdom and China surpassing it, said an official release from the PIB. A total of 54 Higher Educational Institutes (HEIs) from India featured in the rankings with IIT Delhi emerging as the country's top-ranked institute by securing the 123rd position. Twelve IITs have made it to the ranking list. Compiled by Quacquarelli Symonds (QS), the internationally recognised ranking system compares HEIs worldwide on an annual basis. Education Minister Dharmendra Pradhan in a statement said, 'From just 11 universities in 2014 to 54 in the latest rankings, this five-fold jump is a testament to the transformative educational reforms ushered by PM Narendra Modiji's government in the last decade. National Education Policy 2020 is not just changing our educational landscape, it is revolutionising it.
