Sign In Get Started

Vedanta's Agarwal Bets ₹1,250 Crore on Rare Earth Magnets

Back to Markets

Macro● Neutral

Vedanta's Agarwal Bets ₹1,250 Crore on Rare Earth Magnets

2026-06-26 00:30 UTCBy AlphaScala Research DeskSource reporting: livemint.comEditorial standards

Vedanta's Agarwal Bets ₹1,250 Crore on Rare Earth Magnets

Navin Agarwal's ₹1,250 crore bet on rare earth magnets through NAN MagneTech targets India's PLI scheme to cut China dependence. Capacity of 1,200 tonnes initially, scaling to 10,000 tonnes.

Continue with

Space Hiring Surges 40% as Skills Gap Bites

What is leverage in trading and how does it work?

India's dependence on China for rare earth magnets is a well-known vulnerability. Last year's export curbs from Beijing, during a trade standoff with the US, pushed domestic automakers into a corner. Now a private venture backed by Vedanta Ltd's executive vice-chairman Navin Agarwal is making the biggest single bet yet on a homegrown alternative.

NAN MagneTech Pvt. Ltd, a newly incorporated subsidiary of Agarwal's holding company NAN GreenMet Pvt. Ltd, plans to invest ₹1,250 crore in its first phase. The company will manufacture neodymium iron boron (NdFeB) magnets – the small, powerful magnets that go into EV motors, wind turbines, and defense systems. Initial capacity is 1,200 tonnes a year, with plans to scale to 10,000 tonnes in phases. For context, India's annual requirement is estimated at 4,000-5,000 tonnes.

The venture is built around the government's production-linked incentive (PLI) scheme for rare earth permanent magnets (REPM), a ₹7,280 crore program announced last year. The deadline to file applications is June 29, 2026. NAN MagneTech deputy CEO Gaurav Shukla confirmed the company's intention to bid. “We are looking forward to participating in the REPM PLI scheme. The bidding entity will be NAN Magnetech Pvt. Ltd,” he said.

The company has already secured land in the Tirupati district of Andhra Pradesh and a financial incentive package from the state, Shukla said, without giving a timeline for construction or production start. It has also signed long-term contracts with an Australian supplier for rare earth elements and with major user industries for NdFeB magnets, though Shukla did not name the counterparties.

On the technology side, NAN MagneTech has engaged Japanese physicist Masato Sagawa, the inventor of NdFeB magnets, as a technical advisor. US-based expert John Ormerod, with over 40 years in rare earth magnet R&D and manufacturing, chairs the technical board.

What the bet means for the supply chain

China controls roughly 90% of global rare earth magnet production and a large share of rare earth element mining across Africa. India meets 80-90% of its demand for these magnets from Beijing. The PLI scheme is designed to reduce that dependence, building a domestic rare earth magnet industry from scratch is a multi-year, capital-intensive process. The technology is proprietary, the supply chain for raw materials is concentrated, and cost competitiveness against Chinese producers is uncertain.

Agarwal's personal investment is notable because it is separate from the publicly traded companies he leads – Vedanta Ltd and Hindustan Zinc Ltd – both of which have their own plans for rare earth element mining and refining. That suggests a two-track strategy: the listed entities handle upstream mining, while the private venture focuses on downstream magnet manufacturing.

For traders, the direct exposure is limited. NAN MagneTech is a private company, not a listed stock. The broader implications for India's EV, defense, and renewable energy supply chains are material. If the venture succeeds – and if the PLI scheme attracts enough bidders to build meaningful capacity – the country's import dependence could shrink over the next five to seven years. If it stalls, the vulnerability to Chinese export controls remains.

What to track

The next concrete marker is the PLI application deadline in June 2026. Before that, the company needs to demonstrate progress on construction, technology transfer, and raw material supply. Shukla said the company has signed long-term supply contracts with user industries, did not disclose details. Any public offtake agreements with major automakers or defense contractors would strengthen the case.

On the downside, delays in technology adoption, cost overruns, or a relaxation of Chinese export restrictions could weaken the investment thesis. India's PLI schemes have a mixed track record – some have spurred manufacturing, others have seen slow uptake. The rare earth magnet program is new, and the technology gap is wide.

For now, the story is one of ambition and early-stage execution. Agarwal's ₹1,250 crore bet is the largest private-sector commitment to India's rare earth magnet push. Whether it translates into production before the next supply shock depends on factors the company does not yet control: technology, raw material prices, and policy continuity.