Rare Earth Corridors to Enhance India's Self-Reliance in Magnet Manufacturing and Technology Development

Industry experts have expressed optimism about the government's budget proposals for establishing rare earth corridors in mineral-rich states like Odisha. These initiatives are expected to drive technological advancements in manufacturing rare earth magnets, which are crucial for devices such as phones, electric vehicles, and defence equipment. The focus on these corridors was highlighted in the budget presented on Sunday.

The Finance Minister, Nirmala Sitharaman, announced an import duty exemption on capital goods necessary for processing critical minerals. This move is part of a broader strategy to promote self-reliance in rare earth minerals, reducing dependency on imports. The exemption is expected to boost mining and processing activities, particularly benefiting sectors like electric vehicles and renewable energy.

Focus on Rare Earth Corridors

Sanjiv Ganeriwala, Chairman of the Mining Council Eastern India at Assocham, emphasised the importance of these corridors. He noted that they would enhance the development of technologies for manufacturing rare earth magnets used in various modern applications. Additionally, refining graphite will support large battery storage solutions for solar energy and other industries.

The proposed corridors aim to integrate mining, processing, research and development (R&D), and manufacturing. Suvendu Bose from Grant Thornton Bharat highlighted that this integration addresses a critical gap in India's energy transition: value-chain depth. The corridors will be complemented by customs duty exemptions for capital goods in critical mineral processing.

Strategic Self-Reliance Initiatives

These measures are designed to advance India's strategic self-reliance in minerals and chemicals essential for electric vehicles, renewables, nuclear power, defence, and advanced manufacturing. The government aims to position India as a leader in these sectors by promoting rare earth or critical minerals.

The finance minister also proposed reducing customs duty on Monazite from 2.5% to zero. Monazite is a key source of rare-earth elements like cerium and neodymium. This reduction is part of efforts to support the establishment of dedicated Rare Earth Corridors in states such as Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.

Boosting Domestic Manufacturing

In November 2025, the Union Cabinet approved a scheme to promote the manufacturing of Sintered Rare Earth Permanent Magnets (REPMs) with a financial outlay of Rs 7,280 crore. This initiative aims to establish 6,000 Metric Tons per Annum (MTPA) of integrated REPM manufacturing in India.

The scheme will facilitate the creation of facilities that convert rare earth oxides into metals, metals into alloys, and alloys into finished REPMs. These magnets are vital for applications in electric vehicles, renewable energy, electronics, aerospace, and defence industries.

Meeting Growing Demand

Driven by increasing demand from various sectors, India's consumption of REPMs is projected to double by 2030 compared to 2025 levels. Currently reliant on imports for its REPM needs, India aims to establish its first integrated REPM manufacturing facilities through this initiative.

This development is expected to generate employment opportunities while strengthening India's self-reliance. It aligns with the nation's commitment to achieving Net Zero emissions by 2070.

With inputs from PTI