China Dominates the Rare-Earth Magnet Supply Chain Behind India's EV Ambitions. Here's What the Numbers Actually Show.

On 4 April 2025, China's Ministry of Commerce and General Administration of Customs introduced export controls requiring licences for specified products associated with seven medium and heavy rare-earth elements, samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. The controlled items include specified metals, alloys, compounds, oxides, and certain permanent-magnet materials, not a blanket ban on every product containing these elements. China formally cited national-security and non-proliferation considerations; the move was also widely interpreted as part of its response to escalating US tariffs. A broader package followed on 9 October 2025, adding controls associated with five further elements, holmium, erbium, thulium, europium, and ytterbium, plus certain processing equipment and technologies. China subsequently suspended implementation of that October package for one year, until 10 November 2026, following US-China negotiations, so it remains suspended rather than cancelled and could resume.

The April controls remain in force and, in practice, are the immediate concern for manufacturers outside China, including in India. It's worth being precise here: not every EV or wind-turbine magnet is automatically caught by these controls. Neodymium and praseodymium, the two elements at the core of most NdFeB magnets, were not among the seven April elements, though high-performance NdFeB magnets frequently incorporate controlled dysprosium or terbium as additives, and samarium-cobalt magnets, more central to aerospace and defence applications, use a directly controlled element. The exposure is real and significant, but it isn't a uniform blanket over every magnet in an EV.

Why this lands hard on India specifically. India's exposure here isn't abstract. EVs exceeded 12 percent of India's total vehicle retail registrations for the first time in June 2026, per FADA data, though that aggregate was driven substantially by electric two- and three-wheelers rather than passenger cars, electric passenger vehicles were closer to 7.7 percent of their own segment that month. That milestone sits against India's widely stated ambition for EVs to reach roughly 30 percent of new vehicle sales by 2030, a policy goal rather than a binding target across every vehicle category. S&P Global Mobility has projected a steep expansion in India's EV battery demand through 2035, illustrating the scale at which the country's electric-mobility supply chain will need to grow. Against that trajectory, an August 2025 parliamentary reply from the Ministry of Mines put India's critical mineral imports at approximately 12.47 million tonnes in 2024–25, with the country remaining fully import-dependent for lithium, cobalt, and nickel. Commercial market-research estimates differ on the exact size of India's own rare-earth magnet market, but they consistently show it growing, driven by electric mobility, renewables, electronics, and industrial demand, small in global terms today, but strategically important to exactly the sectors India is trying to scale.

A precision worth insisting on: mining, refining, and magnet manufacturing are three different numbers, and China's dominance grows at each stage. This is the part I think gets flattened in most coverage, including some of my own reading before I checked the underlying IEA figures directly. According to IEA data for 2024, China accounted for approximately 60 percent of global mined production of the four principal magnet rare earths, neodymium, praseodymium, dysprosium, and terbium. That concentration is considerably more pronounced at the next stage: China represented about 91 percent of global refined output of the same four elements. And it's higher again at the final stage, sintered permanent magnet production, where China's share has risen from around 50 percent two decades ago to 94 percent in 2024. Mining, refining, and finished magnets are three distinct points in the value chain, and conflating them into one “China controls X%” headline understates exactly where concentration is greatest: not primarily in extraction, but in separation, refining, and magnet manufacturing. The IEA's own outlook adds a sobering forward-looking data point here too: even accounting for planned capacity expansion outside China, existing and announced ex-China projects are only expected to meet about half of projected 2035 mining demand for magnet rare earths, a quarter of refining demand, and well under a fifth of magnet demand.

What India is building, and what still needs deeper capability. India's policy activity has been most visible in exploration, mineral auctions, and regulatory reform, though more recent measures have begun addressing processing, recycling, and integrated magnet manufacturing too. The 2023 Mines and Minerals (Development & Regulation) Amendment removed six mineral groups, including lithium, beryllium, titanium, niobium, tantalum, and zirconium, from the restricted atomic-minerals list, enabling greater private-sector participation in both their exploration and mining. The National Critical Mineral Mission, announced in the 2024–25 Union Budget and approved by the Union Cabinet on 29 January 2025, covers exploration, mining, processing, recycling, and overseas acquisition; the Geological Survey of India took up 195 critical-mineral exploration projects in the 2024–25 field season. In September 2025, the Environment Ministry exempted mining projects involving atomic, critical, and strategic minerals from the public-consultation stage of environmental clearance, citing national-defence, security, and strategic considerations. And on 26 November 2025, the Union Cabinet approved a ₹7,280-crore scheme to establish 6,000 tonnes per year of integrated sintered rare-earth permanent-magnet capacity, covering the full conversion from rare-earth oxides through metals and alloys to finished magnets.

India isn't starting from zero, organizations like IREL already have some rare-earth separation and specialised magnet capability. But policy reforms, exploration announcements, and mineral auctions can be put in place relatively quickly; translating them into commercially viable mine output, let alone refining and magnet-manufacturing capacity at scale, generally takes years. That is also, by the IEA's own data, where China's advantage is largest: 91 to 94 percent downstream, versus 60 percent at the mining stage. A 2026 CSIS assessment of the first year of these restrictions made a similar point: resilience should ultimately be judged by sustained production and diversified supply, not by policy announcements or capital committed on paper.

What this means for anyone planning around India's clean-tech and EV supply chains: Track the restriction, not just the headline, the April 2025 licensing regime is the one currently in force; the broader October round is suspended until 10 November 2026, not cancelled, and sourcing strategy should account for the possibility it resumes. Ask which stage of the value chain a “localisation” claim is actually about, policy reforms, exploration announcements, and mineral auctions are important early steps, but they reveal little about when China-independent, commercially scaled magnet supply will actually become available. And treat separation, refining, alloy production, and high-performance magnet manufacturing as the multi-year bottleneck, not access to mineral deposits alone, India has geological potential, growing demand, and an increasingly serious policy framework; the harder task is converting those into reliable commercial-scale output at the stages where China's concentration is highest.

A mineral deposit is only the beginning of this supply chain. The more concentrated bottleneck lies in separating and refining rare-earth materials, converting them into metals and alloys, and manufacturing high-performance magnets at scale. India's newer policies increasingly recognize that. But building reliable commercial output at that end of the chain will take considerably longer than changing an export-licensing rule.