According to sources familiar with the matter, Commerce and Industry Minister Piyush Goyal recently instructed IREL to stop exporting rare earth elements particularly neodymium, vital material used in powerful magnets for electric vehicle (EV) motors. The minister's remarks came during a meeting with leading executives from India's auto and manufacturing sectors, where the focus was squarely on reducing foreign dependency and strengthening local capabilities.
Since 2012, IREL has been supplying rare earths to Toyotsu Rare Earths India, a subsidiary of Japan's Toyota Tsusho. The processed materials were then shipped to Japan for use in industrial magnets. In 2024 alone, Toyotsu received over 1,000 metric tonnes, roughly a third of IREL's total output of 2,900 tonnes, highlighting the significance of this now-paused trade link.
Historically, India exported rare earths due to limited domestic refining infrastructure. But with China's tightening grip on global rare earth exports and rising geopolitical tensions, India is pivoting to become not just a supplier of raw materials but a major player in rare earth processing and value addition.
IREL is already laying the groundwork, awaiting approvals for four new mines as part of its ambitious expansion plan. This aligns with India's broader industrial strategy: reducing reliance on Chinese supply chains while bolstering sectors like electric mobility, defence, and electronics manufacturing.
