India targets rare-earth permanent magnet production by year-end
$802 million program seeks to bypass China-dominated processing, reserves are easy part of the story
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India says it will start producing rare-earth permanent magnets domestically by the end of this year — a bold deadline for a supply chain that China currently dominates from mine to finished motor.
According to Reuters, India’s federal mining minister G. Kishan Reddy said New Delhi aims to begin production in partnership with the private sector. The government approved a 73 billion rupee ($802 million) program in November to build out rare-earth permanent magnet manufacturing, with plans for four critical mineral processing plants across four states. The magnets are key inputs for electric vehicles, aerospace, defence systems, and renewable energy equipment.
India’s pitch is simple: it has the rocks. The U.S. Geological Survey puts India’s rare-earth reserves at 6.9 million tons, third-largest globally. The awkward part is that reserves are not supply — not when the choke point is separation and refining.
Beijing controls roughly 90% of processing, Reuters notes, and China restricted shipments last year, prompting automakers elsewhere to scramble. The real strategic asset is not the ore body but the industrial chemistry and high-volume process control needed to turn mixed rare-earth concentrates into high-purity oxides, then into alloys and sintered magnets.
India’s plan leans on a familiar state template: the mining ministry and a state-run entity say they have developed the necessary technology, and the government will catalyze private investment. Yet the same Reuters report points out why India has underperformed despite large reserves: private firms have made limited investments, and India currently mines only a fraction of its potential output.
That gap is not merely a matter of “incentives” in the abstract. Rare-earth processing is capital-intensive, environmentally contentious, and technically fussy — with long permitting cycles and a habit of producing waste streams that local politics suddenly discovers it hates. If the state intends to accelerate production, it will likely do what states do best: subsidize, designate “strategic” projects, and socialize risk. If it intends to attract serious private capital, it will need to do what states do least: provide stable rules, predictable permitting, and the freedom to fail without turning every setback into a parliamentary spectacle.
Meanwhile, demand is rising. Reuters reports India’s consumption of rare-earth permanent magnets is expected to double by 2030. Without domestic processing, “resilience” becomes a procurement slogan — and India remains exposed to Chinese export policy, pricing power, and the geopolitics of industrial inputs.
If India actually hits year-end production, it will be an industrial achievement. If it doesn’t, the deadline will have served its secondary purpose: signaling seriousness to investors and voters. In critical minerals, even the press release is part of the supply chain.