Pune Firm Cracks Rare Earth Code—But India’s Magnet Shortage Persists
A Pune-based firm has achieved a significant milestone by launching India's first rare earth metals plant, marking a step towards self-reliance in critical materials. The plant boasts a production capacity of 15 tonnes per month. However, this achievement highlights a persistent challenge: India's reliance on imports for high-powered magnets.
Rare earth elements (REEs) are a set of seventeen metallic elements crucial for various modern technologies, including electric vehicles (EVs), wind turbines, consumer electronics, and defense equipment. Within this group, neodymium, praseodymium, dysprosium, and terbium are essential for manufacturing high-strength permanent magnets. These magnets are key components in EV motors, wind turbine generators, and missile guidance systems.
India possesses the fifth-largest reserves of rare earth elements in the world, estimated at 8.52 million tonnes. However, the country contributes less than 1% of global rare earth mining. This is due to several challenges, including limited infrastructure, technological issues, regulatory hurdles, and environmental concerns.
The situation is further complicated by China's dominance in the rare earth market. China controls a significant portion of the global rare earth processing and magnet production. This dependence has made India vulnerable, especially after China imposed export restrictions on rare earth magnets in April 2025, citing national security and non-proliferation concerns. These restrictions led to concerns about potential disruptions in India's automotive and electronics industries.
The rare earth magnet shortage poses a threat to India's ambitions in the electric vehicle (EV) sector, renewable energy, consumer electronics and defence readiness. The automotive sector, in particular, is on high alert, with concerns mounting that production could be disrupted. Some automakers are already redesigning certain motors to use light rare-earth magnets and reworking supply chains. However, many companies are hesitant to speak about the crisis, fearing they might lose customers.
The Indian government has recognized the strategic importance of securing the supply of rare earth magnets. It expects commercial production of rare earth magnets to begin by late 2025, with the aim of scaling to global relevance by 2030. This involves encouraging domestic exploration, offering incentives for refining capabilities, and forging mineral alliances with trusted nations. The Geological Survey of India (GSI) has already started exploration in Assam and West Bengal.
The launch of India's first rare earth metals plant in Pune is a positive step towards reducing import dependence and boosting domestic production. However, it is crucial to address the entire value chain, from mining and processing to magnet manufacturing, to achieve true self-reliance. This requires significant investment in technology, infrastructure, and skill development. It also requires a proactive approach to building strategic reserves and diversifying supply sources.
The current rare earth crisis serves as a wake-up call for India. It highlights the need for a comprehensive strategy to secure access to critical materials and reduce vulnerability to geopolitical risks. By promoting domestic production, fostering international collaborations, and encouraging innovation, India can strengthen its position in the global green economy and ensure its long-term industrial competitiveness.
