The government’s announcement of a Rs 7,280-crore scheme to boost domestic manufacturing of Rare Earth Permanent Magnets (REPM) signals far more than an industrial push — it marks a strategic recalibration in India’s economic and geopolitical posture. Rare earth elements may be unfamiliar to most citizens, but they sit at the heart of the devices and technologies that power modern life, from smartphones and electric vehicles to wind turbines and missile systems. These magnets, derived from little-known metals such as neodymium and samarium, generate magnetic fields far stronger than conventional alternatives, allowing motors, sensors and electronics to become slimmer, faster and more efficient. In other words, rare earth magnets are the unsung enablers of the energy transition, the digital economy, and advanced defence capabilities. Yet for decades, the world has sleepwalked into a troubling reality: an overwhelming dependence on one country, China, for the extraction, processing and manufacturing of these critical materials. India, with some of the world’s largest reserves of rare earth oxides locked under its coastal sands, remained a marginal player in this strategic sector, accounting for less than one per cent of global production. This mismatch — abundant geological wealth but negligible market presence — lies at the centre of India’s current policy shift. The new scheme seeks to address a chronic gap that has long constrained the nation’s technological ambitions: the absence of a domestic rare-earth magnet ecosystem that can support industries ranging from electronics and automobiles to renewable energy and defence.
India’s rare earth reserves, estimated between 6.9 and 8.5 million tonnes, place the country roughly third in the world by volume. Most of these resources lie along the monazite-rich sands of Tamil Nadu, Kerala, Andhra Pradesh and Odisha, with inland deposits in West Bengal, Maharashtra, Jharkhand and Gujarat offering additional potential. In recent years, new hard-rock rare-earth discoveries in Rajasthan and Gujarat have added strategic depth. But reserves alone do not translate to power; the true value emerges only when nations develop the ability to mine, refine, separate, and convert these minerals into high-value products like permanent magnets. This is precisely where China surged ahead. Through decades of state-directed investment, Beijing built an integrated rare-earth chain that now spans mining to magnet fabrication. Today, China controls the overwhelming majority of global rare earth processing and nearly the entire supply of advanced permanent magnets — a dominance reinforced by export restrictions that have repeatedly exposed the vulnerabilities of other nations. India itself has experienced this directly: China has limited the export of rare-earth magnets to India, permitting them only under strict conditions related to non-defensive usage. Although these restrictions were briefly relaxed under a US-China arrangement, the underlying asymmetry persists. Meanwhile, demand for REPMs is accelerating worldwide as electric mobility expands, wind turbines proliferate, and consumer electronics continue to shrink and strengthen. A single electric vehicle can require several kilograms of rare-earth magnets in its traction motor. A single wind turbine needs hundreds. Without a secure domestic supply, India risks not only higher costs but also strategic dependence at a time when technology has become a theatre of geopolitical contest. The government’s scheme, therefore, reflects both economic prudence and national security foresight — an acknowledgement that the nation must build capabilities across the entire rare-earth value chain if it is to remain competitive in the coming energy and technology landscape.
But the path ahead is neither automatic nor easy. The rare earth ecosystem is notoriously complex, with challenges lingering at every step of the supply chain — from environmentally-sensitive mining to chemically intensive separation processes to precision manufacturing of magnets that require high purity, specialised alloys and tightly controlled production environments. India’s ambitions must therefore be matched by investments in advanced processing technologies, research partnerships, refinement capacity, and industrial-scale magnet plants. The Mission on Critical Minerals, already underway, attempts to address this gap by mapping deposits, developing processing capabilities, and encouraging private participation. Yet the global context is equally important. The world is in the midst of a quiet but fierce contest to secure critical minerals, driven by climate goals, defence modernisation, and the strategic rivalry between major powers. China’s head start, both in infrastructure and experience, will not be easily overcome. Western nations, too, are scrambling to reduce their own dependence, and competition for alternative sources — whether in Africa, Latin America, or Australia — is intensifying. India must therefore combine domestic initiatives with diplomatic strategy: diversifying supply sources, forging partnerships for technology transfer, and offering a transparent, stable framework that attracts global magnet manufacturers to local production. The success of the REPM scheme will ultimately depend on India’s ability not only to mine and refine rare earths at scale but also to convert them into the sophisticated products needed by electric vehicles, renewable energy systems, electronics, robotics and defence applications. This is a pivotal moment. If India can translate its geological advantage into manufacturing strength, it will reduce its dependence on China, secure critical supply chains, and position itself as a key player in a rapidly evolving technological order. But if it falters, it risks remaining a resource-rich but value-poor participant in an increasingly contested global economy. The stakes could not be clearer: rare earths are no longer just minerals — they are the building blocks of national power in the 21st century.