India's burgeoning electric vehicle sector faces hidden import dependencies on critical minerals and rare-earth magnets, exposing its clean-energy supply chain to geopolitical risks. To secure long-term self-reliance, the country must urgently develop a domestic rare-earth ecosystem by scaling up mining, processing, and particularly recycling capabilities. Recovering valuable materials from end-of-life batteries, traction motors, and manufacturing scrap will help bridge the gap between future demand and domestic production capacity. Leveraging existing policy frameworks like the National Critical Mineral Mission and integration with programs such as PM E-DRIVE can drive market demand for recycled content. Ultimately, creating a circular economy ensures that India retains critical economic and strategic value throughout the entire lifecycle of its clean-energy assets.

India's burgeoning electric vehicle sector faces hidden import dependencies on critical minerals and rare-earth magnets, exposing its clean-energy supply chain to geopolitical risks. To secure long-term self-reliance, the country must urgently develop a domestic rare-earth ecosystem by scaling up mining, processing, and particularly recycling capabilities. Recovering valuable materials from end-of-life batteries, traction motors, and manufacturing scrap will help bridge the gap between future demand and domestic production capacity. Leveraging existing policy frameworks like the National Critical Mineral Mission and integration with programs such as PM E-DRIVE can drive market demand for recycled content. Ultimately, creating a circular economy ensures that India retains critical economic and strategic value throughout the entire lifecycle of its clean-energy assets.

India's burgeoning electric vehicle sector faces hidden import dependencies on critical minerals and rare-earth magnets, exposing its clean-energy supply chain to geopolitical risks. To secure long-term self-reliance, the country must urgently develop a domestic rare-earth ecosystem by scaling up mining, processing, and particularly recycling capabilities. Recovering valuable materials from end-of-life batteries, traction motors, and manufacturing scrap will help bridge the gap between future demand and domestic production capacity. Leveraging existing policy frameworks like the National Critical Mineral Mission and integration with programs such as PM E-DRIVE can drive market demand for recycled content. Ultimately, creating a circular economy ensures that India retains critical economic and strategic value throughout the entire lifecycle of its clean-energy assets.

India's EV transition is gaining momentum, supported by strong policy and growing domestic manufacturing. However, the sector still relies heavily on imported critical minerals, battery materials, cells, rare-earth magnets and advanced components, a substantial hidden import burden. Recycling can reduce this dependence by recovering valuable materials from end-of-life batteries, motors and electronic components and creating a domestic secondary resource base. Integrating recycling with EV manufacturing strengthens supply-chain resilience, conserves critical resources and supports a self-reliant, circular EV ecosystem.

India's EV sector depends heavily on neodymium-iron-boron (NdFeB) permanent magnets, and offshore wind will face the same in due course. These magnets are critical in traction motors and wind-turbine generators. India imports more than 90% of its rare-earth magnets from a single country, exposing the clean-energy supply chain to geopolitical and trade risks. China's export restrictions and licensing measures in 2025 brought this vulnerability into focus, raising concerns over the availability of magnets and related technologies for Indian manufacturers. India needs a domestic rare-earth ecosystem with scaled-up mining and processing, magnet manufacturing and recycling.

What Closing the Loop Actually Looks Like

India's challenge in rare earths has not been the availability of resources but the limited downstream value chain needed to convert them into strategic products. Despite significant resources and decades of experience, India needs greater capability in metallization, alloying, NdFeB magnet manufacturing and material recovery, the stages where much of the economic and strategic value is created. Closing this gap requires a circular approach built around three feedstocks: end-of-life EV traction motors and two-wheelers; spent batteries and their recoverable materials; and manufacturing swarf, scrap and rejects from magnet and motor production. Recovering and re-alloying these materials strengthens domestic supply, reduces waste and supports a more resilient value chain.

The supply gap remains large. The recently approved ₹7,280-crore rare-earth permanent magnet scheme aims to establish around 6,000 tonnes of annual sintered magnet capacity by 2030, while projected domestic demand could exceed 8,000 tonnes. That gap makes recovered and recycled feedstock strategically important. Recycling end-of-life magnets, motors and manufacturing scrap can supplement primary raw materials and help narrow the distance between planned capacity and future demand.

The Policy Lever Already Exists

India has already established an important policy framework. The National Critical Mineral Mission (NCMM), launched in January 2025 with a ₹34,300-crore outlay over seven years, seeks to strengthen the domestic critical-mineral value chain and reduce import reliance. Its ₹1,500-crore recycling incentive scheme promotes recovery of critical minerals from secondary sources, giving rare-earth recovery from end-of-life magnets, EV motors and manufacturing scrap a solid foundation.

Battery recycling is a useful, though not directly comparable, model. The Battery Waste Management Rules accelerated the shift to an EPR-based system through mandatory recovery requirements, showing that regulatory demand for recovered materials can matter as much as financial incentives. Rare-earth recovery is technically more complex and involves smaller volumes, but the lesson holds. Existing localisation mechanisms such as PM E-DRIVE, PLI-Auto and advanced-chemistry-cell incentives could include targets for recovered rare-earth material in magnets, creating a viable market for recycled rare earths without a new policy framework.

Make in India for clean energy does not end at the factory gate. Its real test extends across the product lifecycle, including what happens when an EV motor or wind-turbine generator reaches end of life. Recovering and reusing rare-earth magnets domestically, rather than treating them as scrap or exporting them, retains critical materials and economic value within India. As millions of EVs and clean-energy assets retire over the coming decade, a circular rare-earth value chain will be an important measure of how deeply Make in India has been achieved.

The author is president of Rare Earth Association of India (REAI) and former CMD, IREL.

The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.

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