India’s Rare Earth Riddle: Powering EVs Amidst Supply Chain Shifts

China’s recent rare earth export restrictions have cast a spotlight on a critical vulnerability in global supply chains, particularly for nations like India. For India, this disruption underscored a paradoxical challenge: despite possessing significant rare earth reserves, the country faces substantial bottlenecks in midstream processing and downstream magnet production – essential components for the burgeoning electric vehicle (EV) industry.

The global EV revolution hinges on powerful permanent magnets, which predominantly rely on rare earth elements. Currently, China dominates the entire rare earth value chain, from mining to manufacturing advanced magnets. India, while rich in primary rare earth ores, lacks the sophisticated infrastructure and technological expertise to convert these raw materials into high-purity oxides and, subsequently, into finished magnets at a commercially viable scale. This reliance on imports for processed rare earths and magnets directly jeopardizes India’s ambitious EV manufacturing targets and energy transition goals.

To transform this challenge into an opportunity, India must aggressively pursue domestic integration. This requires a multi-pronged strategy encompassing accelerated technological prowess through robust R&D and skill development in rare earth extraction, separation, and alloy/magnet manufacturing. Commercial incentives, including favourable policies and investment schemes, are vital to attract both domestic and international players to build indigenous processing and manufacturing facilities. Furthermore, embracing a circular economy model – focusing on urban mining and recycling of end-of-life products containing rare earth magnets – can significantly augment supply and reduce reliance on virgin resources. By fostering self-reliance, India can secure its EV future and emerge as a resilient player in the global rare earth ecosystem.