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India’s Blueprint to Localise Rare Earth Magnet Production
Articles- Aug 30,25
According to Primus Partners, India must localise rare earth magnet production with a five-pillar strategy to reduce China dependence and secure the electric vehicle (EV) and clean energy ecosystem.
India’s ambitions in electric mobility, renewable energy, and advanced manufacturing are on a sharp growth trajectory. However, a critical vulnerability threatens to slow this momentum — the country’s near-total dependence on imported rare earth magnets, specifically neodymium–iron–boron (NdFeB) magnets.
A new report by Primus Partners, titled “From Extraction to Innovation: A Blueprint for Enhancing Rare Earth Magnet Ecosystem in India’s EV Roadmap”, offers a comprehensive strategy to address this gap. It outlines how India can leverage its reserves, policy momentum, and industry appetite to create a self-reliant, globally competitive ecosystem for rare earth magnet production.
Why rare earth magnets matter
NdFeB magnets are indispensable to modern technology. From electric vehicles (EVs) and renewable energy turbines to defence systems and consumer electronics, they enable high-efficiency, lightweight, and compact designs. Each electric vehicle uses 1–2 kg of these magnets, while sectors such as wind power, robotics, and aerospace depend heavily on their performance characteristics.
India, aiming for 30 per cent EV penetration by 2030, is projected to need around 7,150 tonnes of NdFeB magnets annually. Yet, despite possessing the world’s fifth-largest reserves of rare earth elements, the country produces none of these magnets domestically. This gap not only exposes Indian industries to volatile global supply chains but also risks derailing sustainability goals.
China’s dominance and India’s risk
Globally, China controls 92 per cent of magnet manufacturing and supplies over 90 per cent of India’s imports. Recent export restrictions and customs delays have already disrupted supply for more than 20 Indian companies, including leading auto component makers. The report warns that such strategic dependence could imperil India’s clean energy, EV, and defence sectors if left unaddressed.
Economically, the stakes are high. By 2030, the Indian NdFeB magnet market is expected to reach Rs 72.95 billion, representing not just a supply chain necessity but a major industrial opportunity.
A five-pillar blueprint for self-reliance
Primus Partners proposes a five-pillar strategy to localise magnet production, strengthen supply security, and accelerate innovation:
1. Market assurance: Introduce government-backed price guarantees and long-term purchase agreements with anchor sectors such as automotive, renewable energy, and defence. This would protect investors from global price swings — neodymium has ranged from $50/kg to $280/kg — and unlock capital for domestic ventures.
2. Pilot hubs and champions: Establish integrated clusters in mineral-rich states like Odisha, Andhra Pradesh, and Tamil Nadu, combining mining, processing, and magnet-making. At least three industrial “champions” must be identified to scale rapidly and tap into a global market projected to hit 131 kt by 2030.
3. Upstream security: Expand the capacity of IREL (India) Limited to at least 1,500 tonnes per year of NdPr oxide and leverage India’s 13.07 million tonnes of monazite reserves. Creating a national strategic magnet reserve would ensure six months of domestic demand coverage, safeguarding critical sectors from supply shocks.
4. Innovation infrastructure: Launch a National Rare Earth Innovation Hub to foster R&D in process optimisation, recycling, and high-performance magnet grades. Recycling alone could meet 35–40 kt of global demand by 2030, reducing reliance on primary mining and offering India a pathway to sustainability leadership.
5. Institutional alignment: Form a Magnet Ecosystem Coordination Cell to align ministries, fast-track approvals, and monitor execution. With only a 3–5 year window to secure global relevance, coordinated action is urgent.
Industry voices
Highlighting the urgency, Davinder Sandhu, Co-Founder and Chairperson of Primus Partners, said, “India has both reserves and demand. Yet despite being the fifth-largest in rare earth reserves, we contribute less than one per cent of global magnet production. The Rs 343 billion outlay under the Critical Minerals Mission is encouraging, but we must avoid remaining resource-rich yet capacity-poor. Unlike China, which built dominance over decades, India must compress this journey with bold investments, rapid clearances, and industry–research partnerships.”
Nikhil Dhaka, Vice President of Primus Partners, added, “The mines-to-magnet gap is real, but so is the opportunity. A single EV has more than 25 magnet-based components. India’s two-wheeler EV segment alone could require 20,500–44,000 tonnes by 2047. Unless we localise production urgently, our manufacturing future will remain dependent on imports.”
The road ahead
India holds a pivotal advantage: significant reserves, a burgeoning EV sector, and policy momentum through initiatives like the Critical Minerals Mission and PLI schemes. However, the report warns that without private sector engagement, strong R&D ecosystems, and aligned government action, India risks missing a once-in-a-generation opportunity.
By localising rare earth magnet production, India can not only safeguard its EV and clean-tech future but also position itself as a global hub for magnet innovation, reducing dependency on imports, strengthening energy security, and unlocking a new industrial growth engine.
2 Blurbs (Optional)
Economically, the stakes are high. By 2030, the Indian NdFeB magnet market is expected to reach Rs 72.95 billion, representing not just a supply chain necessity but a major industrial opportunity.
Despite being the fifth-largest in rare earth reserves, India contributes less than 1% of global magnet production. The Rs 343 billion outlay under the Critical Minerals Mission is encouraging, but we must avoid remaining resource-rich yet capacity-poor.
Primus Partners
Davinder Sandhu
Nikhil Dhaka
rare earth magnets
NdFeB
India
China
electric vehicles
Critical Minerals Mission
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