Mumbai, Oct. 9 -- The government is working to build domestic capacity for rare-earth permanent magnets, which are used in automobiles, electronic hardware and other manufacturing sectors, Principal Secretary-2 to the Prime Minister Shaktikanta Das said at the Kautilya Economic Conclave 2026. The initiative is intended to reduce vulnerabilities in a strategically important section of the global supply chain.

Das said the government had responded to disruptions and restrictions affecting rare-earth-related exports by launching measures to develop domestic capabilities. He described rare-earth permanent magnets as a critical manufacturing component, with applications spanning automobile production, electronic hardware and several other industrial activities.

The move follows concerns over the concentration of global supply and processing capacity in China. Das said Chinese supplies accounted for about 80 to 90 per cent of the rare-earth magnet supply and the wider ecosystem, making restrictions imposed by Beijing a concern for countries and industries worldwide.

China's Ministry of Commerce announced expanded rare-earth export controls in October 2025, according to a Reuters report. The measures covered additional rare-earth elements and related materials, while introducing greater scrutiny for certain foreign companies using Chinese rare-earth materials or equipment. The rules included controls on specified samarium-cobalt permanent magnets, as well as neodymium permanent magnets containing terbium or dysprosium.

The notification also covered parts, components and modules containing the specified materials. It further stated that export applications involving certain advanced semiconductor-related items and artificial intelligence research with potential military applications would be assessed on a case-by-case basis. Against this backdrop, developing domestic rare-earth magnet capacity is being treated as an important step towards strengthening India's manufacturing ecosystem and reducing exposure to external supply disruptions.

Published by HT Digital Content Services with permission from Construction World.