In a significant development with implications for India’s manufacturing and automotive sectors, the Prime Minister’s Office (PMO) on Friday convened a high-level internal meeting to assess the country’s preparedness and policy trajectory on rare earth magnets, multiple sources told CNBC-TV18.According to sources aware of the matter, “the meeting was attended by senior officials from the Department of Heavy Industries and the Ministry of Mines.”
The deliberations come against the backdrop of a sharp and concerning disruption in imports of rare earth magnets from China—India’s primary supplier—since April 2025.
“The complete halt in rare earth magnet imports from China has raised red flags, particularly in the automotive and electronics sectors that are heavily reliant on these critical inputs,” a senior government official said on condition of anonymity.India’s import bottleneck and policy pushRare earth magnets, used extensively in electric motors, wind turbines, medical devices, and defense technologies, are largely sourced from China, which controls over 80% of the global supply.The ongoing import freeze has reportedly left many Indian manufacturers grappling with inventory challenges and disrupted supply chains.The PMO meeting, sources said, “took stock of pending import applications with Chinese authorities and the associated delays in regulatory clearances. Officials are also understood to have discussed a broader policy approach to reduce dependence on a single source and to accelerate the development of an alternative, self-reliant supply chain for rare earths.”
₹1,345 crore incentive scheme under reviewAs part of the discussions, officials reviewed the contours of the proposed ₹1,345 crore incentive scheme aimed at bolstering domestic manufacturing of rare earth magnets, sources said.”The meeting assessed the status of inter-ministerial consultations on the scheme, which aims to encourage private players to invest in rare earth processing, value addition, and magnet production capabilities within India,” sources added.“Building a localised supply chain and attracting investments in rare earth mining and magnet production are now being viewed as strategic imperatives,” a second source added.Roadmap for Domestic Mining and Capacity BuildingIn addition to reviewing short-term challenges, the PMO meeting is understood to have explored the possibility of establishing a long-term roadmap to develop India’s rare earth mining, refining, and manufacturing infrastructure. This includes identifying viable rare earth reserves, ensuring regulatory coordination between the Centre and States, and building institutional and technical capabilities for magnet production, sources said.Sources indicate that further detailed inter-ministerial discussions are expected soon, as a follow-up to the PMO meeting, to finalise actionable policy steps and move forward with implementation.Strategic importance of rare earthsRare earth elements (REEs) like neodymium, praseodymium, and dysprosium are indispensable for high-performance magnets used in electric vehicles (EVs), renewable energy equipment, and defense technologies. As India aims to scale up its EV ambitions and reduce import dependency in critical sectors, rare earths have assumed heightened strategic importance.The latest meeting signals that the government is actively seeking to not only address immediate supply disruptions but also chart a long-term strategy to secure India’s place in the global rare earth value chain.
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