India's Strategy in Rare Earth Permanent Magnets (REPM)
India is focusing on strengthening its position in the strategic materials market, particularly in rare earth permanent magnets (REPM).
Key Developments
- Financial Outlay: The Government of India has approved a ₹7,280 crore financial package to boost domestic manufacturing of REPMs.
- Objective: The Production Linked Incentive (PLI) scheme aims to fill critical supply-chain gaps across various industries.
- Global Context: China’s dominance in REPMs has posed challenges for countries like the US and India, prompting a push for alternative supply sources.
Strategic Aims
- Develop local production of REPMs and establish collaborations for offshore capacity development.
- Leverage past successes in similar schemes, notably in electronics, which have boosted exports.
Market Implications
- India imported 53,748 metric tonnes of REPMs in FY25, with consumption expected to double by 2030.
- The main goal is import substitution to reduce reliance on foreign supplies and strengthen local supply chains.
Geopolitical and Economic Considerations
- REPMs are crucial for electric vehicles (EVs) and renewable energy (RE), sectors vital for reducing fossil fuel dependency.
- Geopolitical tensions have highlighted the need for energy source diversification, including reliance on Russian supplies amid Western sanctions.
- Local REPM production is a strategic move to avoid international trade conflicts.
Future Prospects
- India is exploring alternatives like electromagnets to reduce reliance on environmentally damaging REPM mining and processing.
- Building resilience in REPM supply chains remains crucial for India’s strategic positioning in the global market.
