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Key Highlights:
Surge in Imports:
- Permanent magnet imports rose to 53,700 tonnes in FY25, up from 28,700 tonnes in FY24 — an 88 percent year-on-year increase.
- 93 percent of imports came from China, whose export restrictions in April 2025 have disrupted global supply chains.
China’s Dominance and Pricing Strategy:
- China continues to be the dominant supplier with a 95 percent share of India’s permanent magnet imports.
- In FY25, while the import quantity from China increased by 95 percent, import value grew only 12 percent, reflecting China’s aggressive price-cutting to retain market control.
Supply Crisis in India:
- Only 2–3 weeks of REE magnet supply remain in India, particularly critical for neodymium-iron-boron (NdFeB) magnets used in EV motors.
- Industry players are expected to send delegations to China to negotiate for uninterrupted supply.
- Chinese suppliers now require Indian importers to give formal undertakings that magnets will not be used for defence or military applications.
India’s Domestic REE Scenario:
Current Production and Capacity:
- IREL (India) Ltd, a PSU under the Department of Atomic Energy, refines REE oxides from domestic ores but lacks alloy-making and magnet manufacturing capability.
- A new oxide-to-magnet plant by a subsidiary of the Midwest Group is expected to become operational in Hyderabad within six months with an initial capacity of 500 tonnes per annum, scaling to 5,000 tonnes by 2030.
Reserves and Production Data
- As per US Geological Survey (January 2025), India holds the world’s third-largest REE reserves at 6.9 million tonnes, after China and Brazil.
- However, production remains low at 2,900 tonnes in 2024, placing India seventh globally.
Mining and Auctioning
- The Ministry of Mines has auctioned three rare earth blocks in Karnataka, Uttar Pradesh, and Chhattisgarh.
- Commercial production is still a few years away, pending exploration and infrastructure development.
Strategic and Economic Challenges
- Securing reliable ore supply remains a challenge, with Indian companies exploring options in Sri Lanka, Mongolia, and Myanmar.
- China’s aggressive price cuts risk undermining the viability of India’s future domestic rare earth magnet production.
Permanent magnets made using rare earth elements (REEs) like neodymium, samarium, dysprosium, and praseodymium are known as REE permanent magnets. These are the strongest type of permanent magnets available today. Key Types:
Major Uses:
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Why in News?
- India’s imports of permanent magnets, many containing rare earth elements (REEs), almost doubled in FY25 ahead of China’s export restrictions imposed on April 4, 2025. This has triggered a potential supply crisis for industries like electric vehicles (EVs), wind energy, aerospace, and defence.
