India Bets Big on Domestic Rare Earth Magnets for EVs

India is embarking on a significant push to indigenize the production of sintered rare earth permanent magnets, critical components for electric vehicles (EVs) and other advanced technologies. This strategic move aims to deepen the country's clean manufacturing ecosystem and reduce reliance on imports.

The Union Cabinet has greenlit the Rare Earth Permanent Magnets (REPM) scheme, backed by an outlay of ₹7,280 crore. This initiative is designed to bolster domestic capabilities in high-technology sectors crucial for clean energy and mobility.

Further supporting domestic manufacturing, recent budget measures include exemption from basic customs duty for capital goods used in critical minerals production. Industrial corridors are also being developed in Tamil Nadu, Kerala, Odisha, and Andhra Pradesh to foster integrated ecosystems for component manufacturing and downstream applications.

India's electric mobility transition is accelerating, driven by policy support, budgetary allocations, and production-linked incentive schemes. EVs are seen as central to national priorities like cleaner growth, energy security, and industrial transformation, embodying the 'Make in India' and 'Atmanirbhar Bharat' vision.

The country's automotive industry, valued at approximately $50 billion, is among the world's fastest-growing. India's economy, currently the fourth-largest globally at $4.18 trillion, is projected to reach $7.3 trillion by 2030.

With a national objective of achieving net-zero emissions by 2070, electric mobility plays a pivotal role in reducing transport emissions, which account for a substantial portion of pollution, particularly from commercial vehicles.

The EV market in India has experienced remarkable growth, with a compound annual growth rate exceeding 60% over the past six years. In the 2024-25 financial year, EV registrations neared 2 million units, primarily driven by electric two-wheelers, while electric passenger vehicles surpassed 100,000 units.

To facilitate EV adoption, the Ministry of Heavy Industries has approved ₹2,000 crore under the PM E-Drive scheme for establishing over 70,000 charging stations nationwide. The Production Linked Incentive (PLI) scheme for automobiles and auto components, with an outlay of ₹25,938 crore, aims to enhance domestic value addition and global competitiveness.

Battery manufacturing is a cornerstone of India's energy security and competitiveness. The PLI scheme for Advanced Chemistry Cell batteries, totaling ₹18,000 crore, targets the creation of 50 gigawatt-hours of domestic capacity, aiming to position India as a global manufacturing hub for batteries.

NITI Aayog highlights electric mobility not just as an environmental necessity but also as a multi-billion-dollar economic opportunity, promising transformation through connected vehicles and new mobility models. India's vision is to transition from adoption to leadership, building resilient industries and sustainable livelihoods through collaboration.