In a strategic bid to secure critical raw materials for the electric vehicle (EV) and electronics industries, the government is actively exploring avenues to boost domestic production of rare earth magnets. The move comes amid China’s export restrictions, which have raised global concerns over supply chain stability.

Officials are evaluating the potential of India Rare Earths, a Government of India PSU, to spearhead rare earth magnet production. The government is also considering public-private collaborations to expand domestic capacity and reduce reliance on China, which dominates the global rare earth supply chain. Commerce and Industry Minister Piyush Goyal recently acknowledged that China's restrictions could have short-term impacts on India’s automotive and white goods sectors.

On 10 June, the Directorate General of Foreign Trade (DGFT) met with auto manufacturers to better understand the challenges faced in securing export licenses from China. To support the sector in the medium to long term, the government is considering a production-linked incentive (PLI) scheme, along with subsidies and incentives aimed at building a self-reliant rare earth magnet manufacturing ecosystem.