October 28, 2025

India is on a mission to boost local production of rare earth magnets with a huge Rs 7,300 crore scheme. These magnets power electric vehicles, mobile gadgets, wind turbines, and heavy machinery. But a big hurdle has appeared! China, which dominates the rare earth world, has announced strict controls on exporting crucial processing equipment. This new move might slow down India’s plans to become self-reliant. China makes 61% of the world’s rare earth materials and controls 92% of their processing, says the International Energy Agency. The big problem? China’s latest rule says companies must get special licenses to export machinery like “centrifugal extraction equipment” and “intelligent impurity-removal machines” used in rare earth processing. The government even asks if these machines have “dual-use” — meaning they can be used for both civilian and military needs. A top auto industry executive shared, “China’s commerce ministry has issued a notification extending export controls also to rare earth production and processing equipment, and rare earth raw and auxiliary materials.” He warns, “This may impact the new scheme the Centre has announced to incentivise local manufacturing of rare earth magnets.” India’s plan is ambitious. The government wants to spend Rs 6,500 crore on setting up new factories and Rs 800 crore on running costs. The scheme recently got a nod from the Expenditure Finance Committee and now waits for Cabinet approval. Already, about 50 companies have applied to join this game-changing project. But here comes the twist! Equipment and technology from Germany and Japan do exist but come with a hefty price tag. As another industry insider said, “Sourcing equipment from Germany and Japan would shoot up costs and affect the viability of projects.” This new export clampdown follows April’s restrictions where China controlled medium and heavy rare earth exports under the excuse of “national security.” Exporters must prove buyers won't use the materials for weapons or mass destruction. India’s Rs 7,300 crore rare earth magnet plan is like a thrilling race. Will it dodge China’s blocks and rev up the local manufacturing engine? Time will tell, but one thing's clear – the stakes are sky-high for India's tech future!

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Tags: India rare earth scheme, China export controls, Rare earth magnets, Local manufacturing, Technology imports, Electric vehicle components,