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.