THE GROWTH MAGNETS

After a disruption in rare earth magnet supplies, India is relying on dedicated corridors to secure these critical industrial inputs and reduce dependence on China

- By M.G. ARUN

Budget 2026 directly confronts a strategic vulnerability exposed last year: India’s dependence on overseas rare earth supplies.

The urgency became evident in April 2025, when domestic automobile manufacturers ran into an unexpected bottleneck—a shortage of rare earth magnets, small yet indispensable components used across both electric and conventional vehicles. The disruption originated in China, which controls over 90 per cent of global rare earth processing capacity. Amid intensifying trade frictions with the US, Beijing abruptly halted rare earth magnet exports.