India’s imports of permanent magnets—many containing rare earth elements (REEs)—nearly doubled to 53,700 tonnes in 2024-25 (FY25) from around 28,700 tonnes the year before, according to official trade data. The surge in imports, with 93 per cent coming from China, preceded Beijing’s April 4 export restrictions on rare earth magnets, which have since disrupted production lines globally. In India, with just 2-3 weeks of REE magnet supply remaining, industry executives are expected to travel to China in a bid to ease the shortage, sources told The Indian Express.
Consumption of permanent magnets has grown significantly in India over the last five financial years—from just 12,400 tonnes in FY21 to 28,700 tonnes in FY24, before imports surged 88 per cent to 53,700 tonnes in FY25. Despite the large jump in quantity imported in FY25, the value of imports grew by only 5 per cent to Rs 1,744 crore, which is suggestive of a decline in prices.
China is the dominant supplier of permanent magnets in India, accounting for upwards of 90 per cent share. Imports from China increased by 95 per cent year-on-year to 50,000 tonnes in FY25. Permanent magnets, especially those made with REEs, are widely used in electric vehicle (EV) motors, wind turbines, aerospace, and defence.
In contrast to FY25, imports in the ongoing financial year are expected to be tempered, after China imposed export restrictions on rare earth magnets and related materials from April 4, as a direct response to US imposing tariffs.
In India, a supply crunch is in the making, especially for neodymium-iron-boron (NdFeB) magnets used in EV motors. Over the past month or so, Indian carmakers are learnt to have used up inventories and there is likely to be a shortage going forward.
“There is only 2-3 weeks of supply left. At present, complying with China’s rules seems to be the only option. There may be a delegation of industry representatives going to China to resolve the issue,” sources said.
Earlier, a senior executive from the Indian car industry told The Indian Express that importers are now required to give their Chinese suppliers an undertaking that the rare earth magnets procured from that country would only be used in vehicles and not for defence or military applications.
Currently, IREL (India) Ltd, a PSU under the Department of Atomic Energy, refines rare earth oxides from heavy metal ores, containing REEs like cerium, lanthanum, neodymium, and praseodymium. However, production is limited. Moreover, the processing of refining oxides into alloys—and then into magnets—is highly technical and virtually non-existent in India.
Sources said an oxide-to-magnet plant of a subsidiary under the Midwest Group, a top natural stones player in India, is expected to get operationalised in Hyderabad in the next six months. Initially with just 500 tonnes per annum (TPA), the plant’s capacity is expected to increase to 5,000 TPA by 2030.
Figuring out the supply chain for rare earth ores is a key challenge, with players looking at importing ores from Sri Lanka, Mongolia, and Myanmar, sources said. Another challenge for domestic players would be to remain viable as China significantly cuts prices of rare earth magnets.
For instance, while the quantity of permanent magnet imports from China increased by 95 percent y-o-y in FY25, the total value of imports increased by only 12 per cent—from Rs 1,274 crore to Rs 1,425 crore. In other words, China massively cut prices of magnets it exported to India in FY25.
According to the US Geological Survey’s January 2025 data, India held the world’s third-largest rare earth reserves in 2024—estimated at 6.9 million tonnes— behind China (44 million tonnes) and Brazil (21 million tonnes). However, on the production front, India ranked seventh at 2,900 tonnes, well behind China (255,000 tonnes), Myanmar (43,000), the US (41,600), Australia, Nigeria, and Thailand.
In the January 2024 report, India ranked fifth in reserves. The latest revision reflects reduction in other countries’ estimates—Vietnam’s reserves were cut from 22 million tonnes to 3.5 million, and Russia’s from 10 million to 3.8 million.
Over the past year, the Ministry of Mines has auctioned three rare earth blocks—one each in Karnataka, Uttar Pradesh, and Chhattisgarh. But with further exploration still required, commercial production remains a few years away.
Consumption of permanent magnets has grown significantly in India over the last five financial years—from just 12,400 tonnes in FY21 to 28,700 tonnes in FY24, before imports surged 88 per cent to 53,700 tonnes in FY25. (Source: File) 
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