How reasonable are India’s its ambitions? | EUROtoday

In November 2025, India accepted a 73bn-rupee ($800m; £600m) plan that might assist it to chop its dependence on China in one of the vital strategic corners of the worldwide provide chain: uncommon earth magnets.

These small however highly effective parts sit on the coronary heart of recent life – utilized in every part from electrical autos and wind generators to smartphones, medical scanners, and defence gear.

Developing a full uncommon earths ecosystem is pricey, complicated and time-consuming. By specializing in magnets as an alternative, one of the vital extensively used rare-earth merchandise, India goals to realize self-reliance extra shortly.

But its success will rely upon how briskly the nation can grasp expertise, safe supplies and scale up, specialists say.

Under the scheme, chosen producers will obtain capital and sales-linked incentives to provide 6,000 tonnes of everlasting magnets a yr inside seven years. The goal is to satisfy rising home demand, which officers count on to double in 5 years.

Industry specialists warn that cash alone is not going to be sufficient.

India at present imports 80- 90% of its magnets and associated supplies from China, which controls greater than 90% of world uncommon earth processing. Official figures present the nation imported some $221m price of magnets and associated uncooked materials in 2025.

That dependence was uncovered final yr when China tightened exports throughout a commerce dispute, hitting Indian carmakers and electronics companies, and forcing the electrical automobile (EV) trade to discover options to uncommon earth magnets altogether.

The disruption was non permanent, however the lesson lingered – and not using a sovereign uncommon earths technique, total industries stay susceptible.

India will not be alone in scrambling for options. The EU, Australia and others have launched comparable efforts to loosen China’s grip. For many international locations, “the timing of the controls came as a surprise”, says Rajnish Gupta, a tax and financial coverage specialist at EY India.

India’s problem, nonetheless, is extra complicated.

For one, it lacks industrial experience. Countries reminiscent of Japan, South Korea and Germany have spent years refining magnet-making expertise. India as compared has just about no commercial-scale expertise, specialists say.

“This is a good step in the right direction, but it’s only a start,” says Neha Mukherjee of Benchmark Mineral Intelligence, a consulting agency that offers with batteries and uncommon earth parts. “India will need strategic partnerships to import technology, skill up its workforce and then build its own capabilities.”

Dr PV Sunder Raju, chief scientist on the National Geophysical Research Institute (NGRI), echoed the priority.

“It’s not possible to just give 73bn rupees and expect a product without a strong background in research and development,” he stated.

There are a number of analysis centres, he factors out, which may be put to the duty. A facility was inaugurated in 2023 on the Bhabha Atomic Research Centre, and one other plant backed by private and non-private companions goals to provide 5,000 tonnes of magnets a yr by 2030.

But neither has but reported output.

There can be the query of uncooked supplies. India holds the world’s third-largest, uncommon earth reserves, about 8% of the worldwide whole, largely within the sands of coastal states like Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra and Gujarat. Yet it accounts for lower than 1% of world mining.

Only one mine is operational within the southern state of Andhra Pradesh, and till lately most of its output was exported to Japan below a bilateral deal. (In June 2025, nonetheless, India reportedly requested the state miner, IREL, to droop these exports to safeguard provides for home wants.)

To be honest, India is actively working to develop mining and processing operations. For occasion, it has arrange the National Critical Mineral Mission (NCMM) below which it pledged to take care of stockpiles and maintain its provide chain resilient.

But even when it does handle to faucet into its personal uncommon earth reserves, it has just some of the weather wanted to make magnets.

So, it has surpluses of lighter uncommon earths reminiscent of neodymium, however lacks extractable portions of heavier parts like dysprosium and terbium, that are important for a lot of high-performance magnets.

That raises the query: even when magnets are made in India, will the uncooked supplies nonetheless come from China?

There are additionally considerations across the scale of this operation. India already consumes an estimated 7,000 tonnes of magnets a yr, Ms Mukherjee says. Producing 6,000 tonnes by the early 2030s should still depart the nation brief – and uncovered – as demand continues to speed up.

“If we do not scale capacity, the problem doesn’t get solved. We’ll still be dependent on China – and China will scale,” Ms Mukherjee explains.

Experts additionally level out that one other problem will likely be to cost domestically made magnets in a manner that they do not get undercut by imports. Chinese magnets are low-cost and, except Indian-made options are competitively priced, imports might proceed to dominate.

The answer, some argue, might lie in incentives not only for producers however for consumers as nicely.

“The hope is that Indian players will continue to put in their entrepreneurial energy and get the ecosystem going,” Mr Gupta says.

Despite the challenges, the introduction of the scheme is a recognition of India’s ambition to bolster its personal uncommon earth ecosystem, and that is worthwhile, he provides.

“I think this is certainly better than not having taken the step at all.”