Highlights

• India approved ₹7,280 crore (~$870M) to build five domestic rare earth magnet factories following China's April 2025 export controls, which exposed critical supply chain dependency, with 90% of global REE processing remaining China-controlled.
• NITI Aayog is organizing a Global EV Summit in March-April 2026, focusing on supply chain resilience and strategic decoupling, highlighting a shift toward a materials-first industrial policy as EV penetration lags at 7.66%.
• India's domestic magnet ambitions face structural challenges, such as lacking upstream heavy rare earths and sintering capabilities, suggesting that a truly independent supply chain remains a long-term goal, despite immediate industry pressures.

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Citing new reporting from Mint, India is rewriting its electric mobility strategy after a tough run: muted interest from global automakers, slow EV penetration, and—most critically—a supply chain crunch triggered by China’s April 2025 rare-earth magnet export controls. Now, NITI Aayog is preparing a Global EV Summit for March–April 2026, positioned as a sequel to Modi’s 2018 MOVE Summit. This time the framing is sharper: supply chain resilience, domestic mandates, and strategic decoupling from China’s NdFeB magnet monopoly.

Behind the scenes, consultations are underway with heavy-industry officials and international experts. The message is unmistakable: India wants investment not just in EV assembly, but in the rare earth elements, magnets, and batteries that power the next manufacturing cycle.

Magnets: The Crisis That Finally Focused Delhi

The rare-earth magnet shock reverberates throughout the piece. China controls ~90% of global REE processing and dominates the sintered NdFeB magnet supply. When Beijing tightened exports in April, India was caught flat-footed. Delhi had to relax localization rules, allowing e-truck and e-bus makers to import Chinese magnet-laden motors while still collecting incentives under the ₹10,900 crore PM E-Drive scheme—an outright admission of structural dependency.

The major development: India has now approved ₹7,280 crore (~$870 million) to build five domestic rare-earth magnet factories. If executed—an open question—India could enter the global magnet supply chain at a moment when the U.S., EU, and Japan are scrambling for non-China capacity.

What’s Accurate—and What’s Wishful Thinking?

India’s EV reset is grounded in real pressures—rare-earth magnet shortages have already disrupted production, EV penetration remains just 7.66% compared to 16.5% globally, and major incentive programs like PLI-Auto, PLI-ACC, FAME, and PM E-Drive are substantial.

VinFast, (opens in a new tab) sensing an opportunity, is expanding aggressively into the gap left by Tesla. But optimism runs ahead of reality: India still lacks upstream heavy rare earths and the metallization and sintering capabilities required for competitive magnet manufacturing; expectations of heavy participation from global EV giants at the upcoming summit are uncertain; and India’s EV challenge is rooted not just in consumer demand but in weak infrastructure and fragile materials security.

The Mint narrative yesterday leans aspirational, emphasizing industrial ambition while understating India’s reliance on Chinese REE separation and heavy rare earth supply—meaning a truly domestic magnet supply chain remains a long-term, not near-term, prospect.

Why This Matters for Global Rare Earth Strategy

If India succeeds—even partially—it becomes a meaningful diversification node for automakers seeking alternatives to China. More realistically, the summit marks a shift toward a materials-first industrial policy, echoing decoupling moves in the U.S., Europe, and Japan.

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