The Indian government has initiated strategic measures to build domestic manufacturing capacity for rare-earth permanent magnets, addressing acute vulnerabilities in global supply chains. Speaking at the Kautilya Economic Conclave 2026, Principal Secretary-2 to the Prime Minister Shaktikanta Das emphasized that establishing domestic production capabilities is essential for safeguarding key industrial sectors, including automobile manufacturing and electronic hardware production.
Principal Secretary-2 to the Prime Minister Shaktikanta Das announced at the Kautilya Economic Conclave 2026 that India is establishing domestic rare-earth permanent magnet manufacturing capacity.
The Union Cabinet approved a financial outlay of Rs 7,280 crore for the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet under the Ministry of Heavy Industries.
IREL (India) Limited is the primary domestic producer extracting rare earths and operationalized the country's first dedicated permanent magnet facility at Visakhapatnam. The central government set a domestic target to build 6,000 metric tonnes per annum (MTPA) of sintered rare earth permanent magnet manufacturing capacity to safeguard clean energy and industrial sectors.
Das pointed out that global dependence on external suppliers became starkly apparent following export restrictions imposed by China, which controls approximately 80% to 90% of the global rare-earth magnet supply and its associated ecosystem. The policy push aims to insulate domestic manufacturers from external supply shocks and secure critical components required across advanced technological applications.
The government's accelerated focus on domestic production follows stringent export controls implemented by China's Ministry of Commerce. Those regulations expanded oversight on rare-earth elements, related materials, and specific manufacturing equipment. The rules introduced strict export licensing requirements for samarium-cobalt permanent magnets, certain neodymium permanent magnets containing terbium or dysprosium, and component modules incorporating these materials.
In addition to permanent magnets, the regulatory framework instituted rigorous case-by-case reviews for export applications concerning advanced semiconductor items and artificial intelligence research with potential military applications. These international trade restrictions underscored systemic dependencies for industrial economies worldwide, prompting New Delhi to fast-track self-reliance initiatives in critical mineral refining and component fabrication.
Developing domestic rare-earth magnet capabilities forms a cornerstone of India's broader industrial strategy to fortify high-tech manufacturing supply chains. Permanent magnets serve as indispensable inputs for electric vehicle motors, wind turbines, consumer electronics, and defense equipment.
By fostering local refining, processing, and assembly infrastructure, policymakers seek to attract investment and build resilience against geopolitical trade disruptions. Implementation details and funding allocations for the initiative are coordinated across central ministries to support industrial growth and secure long-term raw material access.
