India’s magnet self-reliance push comes amid a deepening China dependence

Building rare earth independence

India’s Rs 7,280-crore plan to cut dependence on permanent magnets imports comes as the country’s reliance on China for both magnets and the equipment needed to make them has risen sharply, a Moneycontrol analysis shows. Permanent magnets, used in electric vehicles, wind turbines, defence systems, electronics and renewable energy, remain overwhelmingly import-dependent even as local demand accelerates.

Permanent dependence?

Over the past decade, India’s permanent magnet imports have expanded rapidly. Total imports grew from about $65 million in 2013 to more than $198 million in 2024, before easing this year.

China now accounts for over 80 percent of India’s magnet imports, up from 73–75 percent a decade ago. Other exporters such as South Korea, Germany, Japan and Malaysia remain far behind.

Even in 2025, despite restrictions, China held an 80 percent share in India’s imports of permanent magnets made of metals.

India’s dependence extends to machinery as well

The dependence is no longer limited to finished magnets. Imports of specialised equipment used in rare-earth separation, refining, alloy production and magnet manufacturing have surged from $1.07 billion in FY18 to $2.47 billion in FY25. China’s role in this segment has grown even faster: imports of such machinery from China jumped from $263 million in FY18 to $1.1 billion in FY25. Its share in India’s machinery imports has nearly doubled — from 24.6 percent to 44.6 percent — the highest in this period.

This growing dependence comes at a sensitive time for global rare-earth supply chains. In October, China’s Ministry of Commerce and General Administration of Customs announced new export controls on key rare-earth technologies and equipment, tightening access worldwide.

Given China’s near-monopoly in rare-earth refining, the move has major implications for countries seeking to build domestic capability, including India.

Can the new scheme turn fortunes?

Against this backdrop, the Union Cabinet earlier this week approved a Rs 7,280-crore scheme to develop an integrated ecosystem for sintered rare-earth permanent magnets. The programme includes Rs 6,450 crore in sales-linked incentives and Rs 750 crore in capital support over seven years, to establish at least 6,000 MTPA of domestic magnet-manufacturing capacity.

The scheme covers the full value chain from rare-earth oxides to metals, alloys and finished magnets aiming to reduce import dependence and lay the foundation for a domestic magnet industry.