Rare earth sector may have low-to-medium indigenisation feasibility

CEA also flags low to medium feasibility for indigenising battery cells & cathode materials and solar wafers & cells

- DEEPAK PATEL

Chief Economic Advisor (CEA) V Anantha Nageswaran has said that indigenisation in three sectors — rare earth permanent magnets (REPM), battery cells and cathode materials, and solar wafers and cells —is highly urgent but its feasibility currently falls in the “low-to-medium” range, senior government officials told Business Standard.

He has also identified seven sectors where indigenisation is both highly urgent and highly feasible. These include pulses, edible oils and oilseeds, active pharmaceutical ingredients (APIs) and key intermediates, and fertiliser inputs such as alternatives to nitrogen, phosphorus, and potassium.

The remaining three out of the seven sectors are critical industrial chemicals, telecom and networking equipment, including non-frontier semiconductor chips, and power electronics, such as insulated gate bipolar transistors (IGBTs) and metal-oxide-semiconductor field-effect transistors (MOSFETs).

The CEA shared this information during the fifth national conference of state chief secretaries in the last week of December.

China currently controls about 90 per cent of the world’s REPM production. These magnets are used in several automobile components, especially in traction motors for electric vehicles (EVs). Since April 2025, China has restricted REPM exports to India, impacting domestic automobile production.