India Ramps Up ₹7,350 Crore Rare Earth Plan As China Expands Export Curbs

India is reportedly preparing a new ₹7,350 crore initiative to bolster domestic production of sintered rare-earth permanent magnets (REPMs) and reduce dependency on imports.

According to a Business Standard report, the scheme, which will run over seven years, aims to establish a fully indigenous manufacturing chain, from converting neodymium-praseodymium oxide to magnet fabrication, with a target annual capacity of up to 6,000 tonnes.  

The government also plans to support five integrated REPM units (each with an annual capacity of 600–1,200 tonnes) through capital subsidies and sales-linked incentives. The country currently imports nearly its entire REPM requirement, with domestic demand of 4,010 tonnes annually expected to rise to 8,220 tonnes by 2030.

Meanwhile, India has reportedly been working with the Kachin Independence Army (KIA), a powerful rebel group controlling parts of northeastern Myanmar, to obtain samples of rare-earth ores.

This push comes after China further tightened its controls on rare earth exports, expanding restrictions on processing technology and limiting overseas cooperation. According to reports, China’s Ministry of Commerce said that the new rules will explicitly restrict exports to foreign defence and semiconductor users.

Beijing has also reportedly asked India to provide assurances that heavy rare earth magnets supplied by Chinese firms will not be re-exported to the United States and will be used solely for domestic purposes. In response, Indian companies have submitted end-user certificates confirming that the magnets will not be used in the manufacture of weapons of mass destruction.

China’s Grip On Rare Earths

China, which accounts for around 60% of global mine production and nearly 90% of processed and permanent magnet output, has widened its export controls. 

Under the new curbs, restrictions on exporting rare earth magnet-making technology will now cover a wider range of magnet types. Equipment used in recycling rare earths has also been added to the export control list, meaning companies must secure a licence before exporting such machinery. Additionally, manufacturers using Chinese components or equipment in their production lines abroad must apply for export licences for any controlled products.

For the first time, the ministry clarified the intended targets of the restrictions. Overseas defence firms will be denied export licences altogether, while applications linked to advanced semiconductor manufacturing would be reviewed separately. The government also prohibited Chinese companies operating overseas from engaging in rare earth-related projects with foreign partners without official approval.

The move builds on sweeping curbs introduced in April, which triggered global shortages before shipments resumed following deals with the U.S. and Europe. 

Impact On India

India imports nearly 90% of its rare earth magnets from China and was severely impacted when China announced export controls in response to US President Donald Trump’s broader tariffs on goods. India was also among the last countries to start receiving rare earth supplies, as businesses currently require government clearance for investments from neighbouring countries, a policy aimed largely at China, following years of border tensions and its close ties with Pakistan.

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