Policy Updates
Bhavana Girase
Background
India is steadily moving towards self-reliance and technological independence, especially under programs like Atmanirbhar Bharat and Make in India. These initiatives aim to reduce reliance on imports across various sectors, including sustainable energy. An essential part of this shift is gaining the ability to access and process critical minerals. Rare Earth Elements (REEs) are crucial in making high-performance components like Rare Earth Permanent Magnets (REPMs). These magnets are widely used in wind turbines, electric cars, electronics and defense applications.
Currently, China dominates the Rare Earth Element (REEs) supply chain, controlling more than 80% of global processing capacity. This puts a lot of countries, including India, at risk of trade disruptions and geopolitical tensions.
Source: Statista.
In May 2023, a Rare Earth Permanent Magnet (REPM) production facility was opened on the Bhabha Atomic Research Centre (BARC) campus in Visakhapatnam. This achievement, made possible through domestically sourced rare earth material and indigenous technology, marks India’s entry into the small group of nations capable of producing REPMs. The move aligns with India’s broader goals under the Viksit Bharat 2047 vision.
While the facility marks a breakthrough, ensuring a stable and self-sufficient supply chain for critical minerals requires a broader, coordinated effort. In line with this objective, the Government of India launched the National Critical Mineral Mission (NCMM) 2025. This initiative focuses on building a resilient value chain through exploration, mining, refining, recycling and recovery of valuable materials from discarded products.
Source: Press Information Bureau
Functioning
To support the growing demand for high-performance technologies, establishing a Rare Earth Permanent Magnet Plant in India is a strategic move, especially given the country’s substantial reserves of Light Rare Earth Elements to boost self-reliance, increase domestic supply and strengthen India’s rare earth value chain.
- India is the third largest holder of rare earth reserves globally, with approximately 8.52 million tonnes of rare earth elements.
- Rare Earth Elements (REEs), consist of 17 elements: 15 Lanthanides, along with Scandium and Yttrium. They are classified into Light REEs (LREEs) and Heavy REEs (HREEs) based on their atomic weight.
- India has plenty of light rare earth elements (REEs) like neodymium and praseodymium, but lacks sufficient reserves of heavy REEs like terbium and dysprosium, which are essential for high-performance magnets.
- India’s primary mineral source of LREEs is monazite, which is mostly found in the beach sands of Tamil Nadu, Kerala, Andhra Pradesh and Odisha. Monazite reserves in India are estimated at 13.15 million tonnes, with about 7.23 million tonnes of Rare Earth Oxide (REO) content.
The rare earth-to-magnet process
Source: Created using Canva
India is making decisive moves to strengthen its rare earth value chain, with a strong focus on critical sectors such as defense, aerospace and advanced manufacturing.
- The Rare Earth Permanent Magnet plant in Visakhapatnam makes Samarium-Cobalt (SmCo) magnets using indigenous fully input material. These magnets are characterized by high thermal stability and corrosion resistance, making them ideal for use in critical sectors.
- IREL (India) Ltd, a Miniratna Public Sector Undertaking (PSU), has initiated the production of key rare earth metals such as samarium, cerium and lanthanum to support domestic supply chains.
- To drive innovation and value addition in REEs, the Rare Earth and Titanium Theme Park is under development in Bhopal. The facility aims to promote R&D and high-value addition opportunities in relation to REEs processing.
- Midwest Advanced Materials (MAM) Private Limited is establishing a Neodymium-Iron-Boron (NdFeB) magnet production plant in Hyderabad, with support from the Technology Development Board, utilizing Molten Salt Electrolysis technology originated from the National Facility for Technology Development and Commercialization (NFTDC). The proposed plan is to increase production capacity from 500 tonnes/year to 5000 tonnes/year by 2030.
- While India has developed capabilities up to the metal extraction stage, midstream capacities for large-scale processing, such as alloy and magnet production, are all underdeveloped.
Performance
- India has entered an exclusive group of nations capable of mining REPMs using native technology and resources.
- India holds nearly 8.52 million tonnes of REEs reserves. Yet, it accounts for less than 1% of global REEs production and refining.
- Even with vast REEs reserves, India has exported only 18 tonnes in the past ten years, signaling a major gap between potential and actual output.
- The ore is of low-grade quality (Neodymium/Praseodymium, 0.0011-0.012%), is often contaminated with radioactivity and is located in environmentally sensitive areas, including CRZ, mangroves and forest areas.
- The NCMM aims to create a sustainable supply chain framework through exploration, processing, recycling policy, mining reform and technological R&D.
- India is also exploring bilateral agreements with resource-rich countries like Australia, Argentina, Brazil and Zambia.
- Collaborations such as with Toyotsu Rare Earths India Ltd., a subsidiary of Toyota Tsusho (Japan), which refines rare earths sourced from IREL in Visakhapatnam.
Impacts
- In India, the establishment of a Rare Earth Permanent Magnet Plant is set to boost domestic production and decrease dependence on other countries.
- India can move closer to its 2070 net-zero target by boosting the production of permanent magnets, which will be supporting renewable energy infrastructure.
- Rare Earth Elements (REEs) are significant for 21st-century technologies such as electric vehicles, wind turbines, electronics and defense capabilities.
- Permanent magnets created from REEs are important for clean energy and strategic applications.
- It helps boost domestic manufacturing and creates local jobs, which in turn leads to new technology improvements.
- Moreover, these plants and capabilities will help strengthen national security and strategic independence.
- The economic opportunities from manufacturing REEs will indirectly enhance the overall economy and government priorities to reduce dependency on imports.
- Lastly, investments in critical minerals infrastructure and supporting global alignment of cooperative and competitive practices will position India as a reliable country in critical mineral supply chains.
Emerging Issues
- The global supply of REEs is heavily concentrated, with around 60% of production occurring in China and around 85% of REEs processing is conducted in the country.
- India’s midstream and downstream infrastructure, especially for magnet-making facilities, remains underdeveloped.
- Environmental and regulatory challenges arise when handling radioactive waste from monazite-rich sands.
- Mining projects face land acquisition disputes, local opposition and bureaucratic delays.
- The REEs sector needs extremely high capital investment, but the private sector participation remains limited.
- Global political tensions can disrupt critical mineral supply chains.
- Limited funding exists for R&D in cleaner and efficient extraction technologies.
Way Forward
To establish a sustainable and self-reliant ecosystem for Rare Earth Permanent Magnets, India must focus on building an integrated value chain from exploration, mining, refining and permanent magnet production. To bridge the gap, India will need to invest in new magnet-making plants. The proper policy framework will seek to improve regulatory procedures, offer financial incentives and involve targeted investments to promote private sector participation, as demonstrated by other nations. Because monazite sands can produce radioactive byproducts, it is equally important and will be especially relevant to develop environmentally friendly mining and processing methods. Over-reliance on a single supplier can be reduced by promoting global collaborations for technology access and operational sourcing from a variety of sources, such as Australia, Japan and the United States. R&D of REE recycling rare earth should also be a priority for India to support a circular economy. That will help ease the pressures on extraction and reduce reliance on primary sources.
Conclusion
The Rare Earth Permanent Magnet Plant represents a major milestone towards self-reliance in key technologies. As India moves closer to the India@2047 vision, investments in rare earth technologies will reduce foreign dependence, boost the economy, and help the country emerge as a global leader in advanced manufacturing, clean energy and other important areas.
References
Press Information Bureau. (2023). India’s rare earth reserves and the need for value addition (Press release). https://www.pib.gov.in/PressReleasePage.aspx?PRID=1914305
Government of Odisha. (2025). Odisha’s rare earth minerals initiative (PDF). https://cdnbbsr.s3waas.gov.in/s35b8e4fd39d9786228649a8a8bec4e008/uploads/2025/08/202508111100645837.pdf
DD News. With 8% of the world’s reserves, India is poised to play a key role in the rare earth elements supply chain. https://ddnews.gov.in/en/with-8-of-worlds-reserves-india-poised-to-play-key-role-in-rare-earth-elements-supply-chain/
Statista. (2023). Countries with the greatest known reserves of rare earths (Chart). https://www.statista.com/chart/33754/countries-with-the-greatest-known-reserves-of-rare-earths/
IREL (India) Limited. Environmental clearance for REPM project (PDF). https://www.irel.co.in/documents/20126/216517/EC+for+REPM.pdf
Press Information Bureau. (2024). Cabinet approves National Critical Mineral Mission (Press release).
Ministry of Mines. National Critical Mineral Mission report (PDF). https://mines.gov.in/admin/storage/ckeditor/NCMM_1739251643.pdf
Press Information Bureau. (2024). Cabinet approves National Critical Mineral Mission (Press release). https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2120525
Press Information Bureau. (2024). India strengthens critical mineral strategy (Press release). https://www.pib.gov.in/PressReleasePage.aspx?PRID=2147282
Press Information Bureau. (2024). India’s progress in rare earth elements and critical mineral ecosystem (Press release). https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2151394
Press Information Bureau. (2023). India’s rare earth reserves update (Press release).
https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1914305
Press Information Bureau. (2024). India’s efforts in rare earth processing and production (Press release). https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2041804
About the Contributor
Bhavana Girase is a Research Intern at the Impact and Policy Research Institute (IMPRI). A data and policy research enthusiast, with a background in UPSC preparation and focusing on turning complex data into interpretative insights for a better understanding of policies.
Acknowledgement
The author sincerely thanks Ms. Aasthaba Jadeja and the IMPRI team for their valuable support and guidance.
Disclaimer
All views expressed in the article belong solely to the author and not necessarily to the organisation.
