Context:
With the global shift towards clean energy technologies, rare earth elements (REEs) have emerged as critical inputs for electric vehicles (EVs), wind turbines, and advanced electronics. In this context, India has launched a ₹7,280-crore scheme to develop domestic capacity in rare earth permanent magnet manufacturing, aiming to reduce import dependence and strengthen supply chain resilience.
Key Highlights:
Policy Initiative & Financial Outlay:
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In late 2025, policy focus has intensified on rare earth elements due to their strategic role in the green transition.
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Government approved a ₹7,280-crore scheme to manufacture 6,000 tonnes per annum of sintered rare earth permanent magnets.
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Targets downstream sectors such as EV motors, wind energy components, and electronics manufacturing.
Technological Importance of Rare Earth Magnets:
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Neodymium-Iron-Boron (NdFeB) magnets are essential for:
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High-efficiency EV traction motors
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Direct-drive wind turbines
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These magnets enable high power density, energy efficiency, and compact designs, critical for renewable energy systems.
Resource Base & Domestic Potential:
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India possesses monazite-bearing beach sands, a significant domestic source of rare earths.
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Monazite contains light rare earth elements along with thorium, a radioactive element.
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Extraction and processing require strict regulatory oversight and waste management.
Supply Chain & Strategic Concerns:
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Although rare earth deposits exist globally, China dominates the supply chain, particularly in refining and separation.
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India currently depends heavily on imports of finished magnets and intermediate materials.
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The new scheme aims to bridge the midstream gap between mining and end-use manufacturing.
Institutional & Implementation Challenges:
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The National Critical Mineral Mission focuses on exploration, but must extend to processing, separation, and magnet manufacturing.
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Long-term offtake agreements with EV and wind manufacturers are essential to ensure commercial viability.
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Environmental compliance is crucial due to radioactive waste risks associated with monazite processing.
Relevant Prelims Points:
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Issue: Import dependence and supply chain vulnerability in rare earth magnets.
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Causes:
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Limited domestic refining capacity
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Global market dominance by China
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Government Initiative:
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₹7,280-crore rare earth magnet manufacturing scheme
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Benefits:
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Supports EV and wind energy expansion
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Enhances strategic autonomy
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Boosts domestic manufacturing
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Challenges:
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Radioactive waste management
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High capital and technological requirements
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Impact:
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Strengthens India’s green industrial ecosystem
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Relevant Mains Points:
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Facts & Definitions:
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Rare Earth Elements: Group of 17 metallic elements crucial for high-tech and clean energy applications.
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Permanent Magnets: Retain magnetism without external power.
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Sintered Magnets: Produced by compacting and heating powdered materials for high performance.
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Keywords & Conceptual Clarity:
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Critical Minerals, Supply Chain Resilience, Green Industrial Policy, Strategic Autonomy
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Environmental Dimension:
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Need for safe handling of thorium-bearing monazite
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Balancing industrial growth with ecological safeguards
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Way Forward:
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Expand midstream processing capacity
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Strengthen public–private partnerships
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Ensure regulatory clarity for radioactive waste
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Integrate rare earth policy with EV and renewable energy missions
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UPSC Relevance (GS-wise):
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GS 3: Industrial policy, clean energy, critical minerals
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GS 2: Governance, strategic resource management
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Prelims: Rare earths, magnets, mineral resources