India is in active discussions with China to maintain a steady supply of rare earth materials, vital components in sectors such as electric vehicles, renewable energy, and defence, a senior government official has confirmed, reported news agency ANI.
The Indian government is currently negotiating with Beijing for the procurement of permanent magnets made from rare earth elements. At the same time, efforts are being made to identify alternative supply routes and boost domestic production to reduce overreliance on China.
“We are exploring various ways to ensure the supply chain remains unaffected. Work is ongoing in that direction,” the official stated.
This push comes in the wake of China’s decision in April to impose export controls on several rare earth-related items, triggering global concerns about supply shortages. The move has particularly impacted countries like India, where these materials are essential for critical industries such as defence, electronics, and renewable energy.
To address these challenges, India is adopting a multipronged approach—balancing imports with domestic mining and fostering international partnerships. The government is also investing in research and development to enhance local capabilities in refining and processing rare earths.
In a bid to encourage domestic production, the government has allocated ₹1,345 crore to support the manufacturing of rare earth magnets. Kamran Rizvi, Secretary at the Ministry of Heavy Industry, shared this update during a recent event in New Delhi. He noted that the initiative will offer comprehensive support, from converting rare earth oxides into magnets to establishing processing infrastructure.
Additionally, a dedicated Production-Linked Incentive (PLI) scheme for rare earth magnets and recycling of critical minerals is under consideration, aimed at strengthening the country’s manufacturing base.
India is also deepening its cooperation with countries such as Australia, the United States, and Vietnam through platforms like the India-US Critical Minerals Partnership and the QUAD. Collaborations with entities like Indian Rare Earths Ltd are underway to expedite the development of domestic resources and reduce dependency on imports.
Efforts are also being made to promote the recycling of essential minerals and revamp mining regulations to encourage greater private sector involvement.
Currently, China dominates the global rare earth supply chain, accounting for over 90% of magnet production capacity worldwide. This monopoly has left many nations, including India, vulnerable to supply disruptions. With limited alternative sources globally, securing access to these materials has become a strategic priority.
In January 2025, the Union Cabinet approved the National Critical Mineral Mission (NCMM), earmarking ₹16,300 crore in government spending, with an additional ₹18,000 crore in investment expected from public sector enterprises.
Union Minister for Coal and Mines, G. Kishan Reddy, recently emphasized the government’s push to involve private companies in exploring and mining critical minerals overseas, with the aim of bringing resources back to meet domestic demand.
Rare earth elements are increasingly vital across a wide range of industries, including electronics, automotive, construction, and heavy machinery.
According to a report by the State Bank of India, India’s annual imports of rare earth elements and related compounds have averaged around USD 33 million over the past four years. However, the value of rare earth magnet imports has been significantly higher—averaging USD 249 million per year. In FY25, magnet imports surged to USD 291 million, marking the highest figure in four years.
