India will begin domestic production of permanent magnets by the end of this year, marking a strategic breakthrough aimed at reducing its overwhelming 95% dependence on imported critical minerals that power electric vehicles, renewable energy systems, electronics and defence manufacturing.
“The mining ministry and a state-run body have developed the technology to produce permanent magnets, with plans to set up four critical mineral processing plants across as many states,” Union Coal and Mines Minister G Kishan Reddy said.
The minister added that the initiative, backed by a ₹7,280-crore production-linked incentive (PLI) scheme, represents a decisive shift from raw material dependence to high-value manufacturing.
“India is currently 95% dependent on imports of critical minerals. This is a strategic vulnerability we must eliminate. The country is moving rapidly from resource dependency to value creation,” Reddy said.
Shift to High-Value Manufacturing
The push comes amid a deepening global crisis in rare earths and magnet supply, dominated by China, which controls more than 87% of the world’s permanent magnet processing capacity. Recent export restrictions, geopolitical tensions and surging demand from EV manufacturers and clean energy companies have exposed the fragility of global supply chains, triggering price spikes and production bottlenecks across industries.
Permanent magnets are critical components in electric motors, wind turbines, smartphones, semiconductors and missile systems — making supply security a strategic priority for major economies.
According to data from the US Geological Survey, India holds the world’s third-largest rare earth reserves, estimated at 6.9 million tonne. However, extraction remains limited, largely due to modest private-sector participation and investment.
India’s manufacturing rollout forms part of the ₹32,000-crore National Critical Minerals Mission, under which more than 4,000 exploration projects have already been launched nationwide. The government has also identified nine Centres of Excellence to drive research and development, innovation and skilled workforce creation.
“We are working in Reform Express mode — strengthening the entire value chain from discovery to advanced processing so that India converts mineral potential into strategic advantage,” Reddy said.
To accelerate domestic value addition, Andhra Pradesh, Odisha, Maharashtra and Gujarat have been selected for establishing critical mineral processing units. Import duties on key raw materials have been removed, alongside the creation of dedicated funding mechanisms to attract private investment.
Regional Powerhouses
The announcements were made at an industry conference organised by the Federation of Indian Chambers of Commerce and Industry in collaboration with the Ministry of Mines, where policymakers and industry leaders highlighted India’s opportunity to emerge as a trusted alternative global supply hub.
The government is also working to strengthen global partnerships for overseas asset acquisition and mineral exploration, reflecting growing international confidence in India’s mineral strategy and opening significant avenues for collaboration, the minister said.
Ed Jager, Minister (Commercial), High Commission of Canada in India, underscored the importance of international cooperation and resilient supply chains. “Critical minerals are now strategic assets shaping the global economy. Canada intends to be a stable and responsible partner for India as we deepen cooperation across exploration, processing and resilient supply chains.”
Industry leaders welcomed the policy shift. Kishore S, COO, Hindustan Zinc, said, “Critical minerals have moved from the periphery to the core of India’s national strategy. The reforms under the National Critical Minerals Mission and transparent auction mechanisms send a strong signal of India’s long-term commitment. Industry stands ready to partner with the government to build an integrated and globally competitive ecosystem.”