India is rolling out a comprehensive plan to become self-sufficient in rare earth materials, essential for electric vehicles and defense applications. India currently depends heavily on imports for these critical materials. A new report from Primus Partners, ‘From Extraction to Innovation,’ provides strategies to increase the domestic production of rare earth magnets. This plan is a crucial component of the government’s broader ‘Make in India’ initiative, aimed at boosting local manufacturing.
The report outlines five key recommendations to advance India’s rare earth magnet sector. Firstly, it suggests providing long-term price assurances for NdPr oxide and NdFeB magnets to encourage investment and production. Secondly, it proposes the establishment of pilot hubs in mineral-rich states to promote production and research. Thirdly, there’s a need to quickly expand the production capacity of Indian Rare Earths Limited (IREL) to fortify domestic supply chains. Fourthly, it suggests creating a National Magnet Stockpile to manage future demand. Fifthly, it recommends a central cell within NITI Aayog or the Department for Promotion of Industry and Internal Trade (DPIIT) to supervise and coordinate the implementation of these initiatives.
The government has taken significant steps, including the removal of customs duties on several essential minerals in the 2024-25 budget. Furthermore, IREL’s Rare Earth Permanent Magnet (REPM) plant in Visakhapatnam, which cost about 197 crore rupees and has an annual capacity of 3,000 kilograms, began operations last year.
China currently controls approximately 90% of the global rare earth magnet production. This means the global supply chain is heavily reliant on China’s policies and export controls. Although India possesses mineral reserves, its abilities in exploration, extraction, and processing are still limited. Exploration work has begun in regions like Jammu and Kashmir, Rajasthan, Jharkhand, and Karnataka.
India has set ambitious targets for EV adoption and emissions reduction, with 30% EV penetration by 2030 and net-zero emissions by 2070. Each electric vehicle utilizes approximately 2 kg of NdFeB magnets. According to reports, India’s demand for these magnets could exceed 7,000 tons by 2030. This rising demand extends beyond the EV sector, encompassing renewable energy, automation, and defense, all competing for these vital materials.