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India’s rare earth magnet imports rise to $291M in FY25 amid China’s export ban, impacting transport, electronics, and EV sectors. The government launches the National Critical Mineral Mission to boost domestic production and reduce dependency.

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India’s Rare Earth Magnet Imports Surge Amid China’s Export Ban

India’s dependence on rare earth magnets has intensified sharply, with imports reaching $291 million in FY25, up from an annual average of $249 million over the previous four years. This rise comes amidst China’s tightening export controls on rare earth elements, posing serious challenges to multiple Indian industries reliant on these critical materials.

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Understanding India’s Rare Earth Magnet Import Trend

Rare earth magnets, crafted from alloys of rare earth minerals, are crucial components in sectors such as transport equipment, electronics, machinery, and construction. According to a recent State Bank of India (SBI) report titled “China’s ban on Rare Earth and Permanent Magnets: Implications for India”, India’s imports of rare earth magnets rose substantially in FY25.

The report highlights that while India’s imports of rare earth minerals and compounds hovered around $33 million annually for the past four years, FY25 saw a slight decrease to $31.9 million for these raw materials. However, the surge in processed rare earth magnets imports to $291 million underscores growing domestic demand that cannot be met locally.

Industries Impacted by the China Export Restrictions

China’s ban on exporting rare earth magnets is directly affecting several crucial sectors in India:

• Transport Equipment: Production of vehicles and transport machinery faces supply-chain bottlenecks.
• Basic Metals: Magnet-based manufacturing components are experiencing shortages.
• Machinery: Usage in industrial machinery systems is disrupted.
• Construction: Equipment requiring magnets for automation and operations is affected.
• Electrical and Electronics: Devices depending on rare earth magnets face production delays.

SBI warns that both domestic production and exports within these sectors could witness setbacks if the supply crunch persists.

Government Initiatives to Boost Domestic Rare Earth Production

Recognizing the strategic importance of rare earth minerals, the Indian government launched the National Critical Mineral Mission (NCMM) in 2025. This ambitious program plans to invest Rs 18,000 crore (approx. $2.1 billion) over six years to foster self-reliance in the critical minerals and rare earth sector.

Several state governments have stepped up efforts by issuing Notices Inviting Tenders (NIT) to auction exploration licenses, promoting local mining and value chain creation. This decentralized approach aims to alleviate supply bottlenecks and reduce India’s import dependency.

Linking Domestic Reserves to Industrial Needs

India has promising rare earth mineral reserves, notably in the Singrauli coalfields. Harnessing these reserves could play a pivotal role in strengthening the entire ecosystem from mining to manufacturing.

Impact on India’s Electric Vehicle (EV) Industry

The rare earth magnet supply crisis has created a concerning ripple effect on the fast-growing electric vehicle (EV) industry in India. Major EV manufacturers like Bajaj Auto, TVS Motor, and Ather Energy have reportedly considered production cuts in response to the scarcity of rare earth magnets essential for high-performance electric motors.

In response, some companies have begun experimenting with alternative technologies, such as ferrite magnets or designing electric motors that do not rely on rare earth magnets, striving to sustain growth despite supply constraints.

Looking Ahead: Building Resilience in Critical Mineral Supply Chains

India’s rising import bills for rare earth magnets underscore the urgency for strategic action. While the National Critical Mineral Mission and state-led initiatives form the backbone of a long-term solution, industry innovation and diversification of supply chains are equally vital.

For sectors dependent on these key materials, balancing import needs with domestic development and alternative technology adoption will be crucial in mitigating future disruptions and sustaining growth.

Indian industries and policymakers must collaborate diligently to transform the rare earth magnet supply challenge into an opportunity for self-reliance and innovation.

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