India triples rare earth push, aims to ditch China
India plans to expand financial incentives for domestic rare earth magnet production to more than 7,000 crore rupees from an initial 2,400 crore rupees as the country seeks alternatives to Chinese suppliers. The proposal awaits cabinet approval, with officials noting the final sum could shift during review. These magnets power electric vehicle motors, wind energy generators, and defense hardware.
Beijing controls about 90 percent of global rare earth magnet processing and tightened export restrictions in April 2025 during trade disputes with Washington, disrupting automotive supply networks worldwide. Prime Minister Narendra Modi said earlier this year that nations must establish diverse supply networks for critical minerals to prevent any single country from wielding them as leverage.
The expanded program faces obstacles. Private capital remains scarce for the sector, while Chinese firms hold most processing technology. Rare earth extraction carries environmental risks from radioactive elements, and facility construction takes years. State enterprises are pursuing overseas mining agreements to secure raw materials since domestic output needs subsidies to compete economically. The government wants the country to satisfy internal demand and become an export center within several years.
