China’s Rare Earth Magnet Ban Triggers India’s Critical Mineral Mission
Investor Summary:
China’s restrictions on rare earth magnet exports have disrupted global supply chains, significantly impacting India. In response, India has launched the National Critical Mineral Mission (NCMM) with a focus on domestic exploration, strategic procurement, and self-reliance.
Key Highlights
30 critical minerals identified as vital for India’s economic and technological security.
India’s imports of rare earth compounds: ~$33 million annually; FY25: $31.9 million.
Rare earth magnet imports average ~$249 million annually, peaking at $291 million in FY25.
Key impacted sectors: Transport equipment, basic metals, electrical & electronics, capital goods.
National Critical Mineral Mission (NCMM):
Launched in 2025, with a total budget of ₹18,000 crore (FY25–31).
Union Budget FY25 announcement for boosting self-reliance and resource acquisition abroad.
₹16,300 crore earmarked for domestic exploration, recycling, and R&D.
PSUs and private firms encouraged to acquire global critical mineral assets.
Why Critical Minerals Matter
Enable strategic sectors like semiconductors, EVs, aerospace, renewables, and defence.
Low share in product cost, but high impact on manufacturing continuity.
Supply is geographically concentrated (China dominates), leading to price volatility and strategic risk.
Economic & Sectoral Impact
Rare earths are integral to clean energy (wind turbines, EV motors), electronics, and defence tech.
Imports surged in FY25, exposing vulnerabilities in India’s manufacturing supply chain.
China’s ban risks disruption in:
EV & auto component manufacturing
Power electronics & semiconductor supply chains
Machinery, robotics, and industrial automation
Telecom and aerospace systems
Banking Sector Exposure Risk
Sectoral disruption may extend working capital cycles and increase credit risk for banks exposed to:
Auto and auto component manufacturers
Capital goods suppliers
Electronics exporters and assemblers
State Participation
States like Odisha have prioritized rare earth processing, committing to industrial investments in refining and value-added applications.
Stocks That May Be Adversely Affected (Import-Dependent or End-User Exposure)
-Manufacturing / Capital Goods / Auto Components
Bharat Forge, Endurance Technologies, Bosch, Schaeffler India
– EV, Batteries, Renewables
Tata Motors, Olectra Greentech, Ather Energy (unlisted), Exide, Amara Raja
