Context:
The Government of India has announced plans to begin domestic production of Rare Earth Permanent Magnets (REPMs) by the end of 2026, aiming to reduce reliance on China-dominated global supply chains for critical minerals.
Key Highlights:
Domestic Technology Development
- The Non-Ferrous Materials Technology Development Centre (NFTDC) has developed indigenous technology for producing REPMs.
- This marks a major step toward self-reliance in critical mineral processing.
Government Support Scheme
- In November 2025, the government approved a ₹7,280 crore scheme to promote rare-earth magnet manufacturing in India.
Proposed Manufacturing Locations
- Four states have been identified for setting up critical mineral processing plants:
- Andhra Pradesh
- Odisha
- Gujarat
- Maharashtra
Strategic Importance
- Rare-earth magnets are essential components in:
- Electric vehicles
- Wind turbines
- Electronics
- Aerospace and defense systems
Global Supply Chain Context
- China currently controls more than 90% of rare-earth magnet manufacturing and processing.
- India is working with the United States, France, and Canada to build alternative critical mineral supply chains.
Critical Minerals Exploration
- India has initiated over 4,000 exploration activities related to critical minerals to strengthen domestic resource availability.
International Cooperation
- India supports the US-led FORGED (Forum on Resource, Geostrategic Engagement and Development) initiative to diversify global critical mineral supply chains.
Relevant Prelims Points:
- Rare Earth Permanent Magnets (REPM)
- High-performance magnets made from rare-earth elements such as neodymium, samarium, and dysprosium.
- Used in EV motors, wind turbines, electronics, and defense systems.
- Critical Minerals
- Minerals essential for modern technologies and economic security, with supply chains vulnerable to disruption.
- NFTDC
- Non-Ferrous Materials Technology Development Centre, engaged in research on advanced materials and metallurgy.
- FORGED Initiative
- An international platform to promote cooperation in critical mineral supply chains and resource security.
Relevant Mains Points:
Strategic Importance of Critical Minerals
- Critical minerals are essential for:
- Energy transition technologies
- Digital infrastructure
- Defense manufacturing
China’s Dominance in Rare Earth Supply Chains
- China controls:
- Major rare-earth mining operations
- Processing and refining capacity
- Global magnet manufacturing
Implications for India
- Dependence on imports exposes India to:
- Supply disruptions
- Geopolitical risks
- Price volatility
Economic and Industrial Opportunities
- Developing domestic production can:
- Strengthen India’s manufacturing ecosystem
- Boost EV and renewable energy sectors
- Support Atmanirbhar Bharat initiatives
Way Forward
- Expand domestic exploration and mining of rare-earth minerals.
- Promote public–private partnerships in critical mineral processing.
- Strengthen international collaboration to diversify supply chains.
UPSC Relevance:
- GS Paper 3: Critical Minerals, Strategic Resources, Energy Transition
- GS Paper 2: International Cooperation in Supply Chain Security