As China tightens grip, German wind majors look to India for rare earth magnets

The interest is still at an early, exploratory stage. Last month, during a visit by a German delegation led by Johann Saathoff, parliamentary state secretary to Germany’s federal minister for economic cooperation and development, the possibility of collaborating with India on manufacturing rare earth magnets was discussed with the Indian government, the people said.

The talks matter because rare earth magnets are essential for offshore wind turbines, and China controls about 90% of global processing capacity, making Europe heavily dependent on a single supplier. India, which has one of the world’s largest rare earth reserves and is building domestic magnet-making capacity that could exceed its own demand, is positioning itself as a potential alternative supplier.

“Germany is completely reliant on China for supply of rare earth magnets. The offshore wind players are now looking at diversifying their supply chain and want to explore if India could meet their demand,” said one of the two people cited above.

Stiftung Offshore Windenergie, the German Offshore Wind Energy Foundation, is considering sponsoring a study to examine potential collaboration and assess how India could cater to the German offshore wind sector’s demand for permanent magnets, the second person said.

“Currently, the talks are at an initial level and largely in the G2G (government-to-government) level with the involvement of industry bodies,” the second person added.

Germany’s wind push

Germany is among the world’s leaders in offshore wind installations. As of end-2024, the country had installed 9.2 GW of offshore wind capacity. It plans to scale this to 30 GW by 2030 and 40 GW by 2035.

Major offshore wind companies in Germany include Deutsche Windtechnik, Global Tech Offshore Wind Gmbh and WINDEA Offshore.

Why magnets matter

Rare earth magnets are a critical input in the global energy transition, particularly for offshore wind turbines. China’s decision in April to curb exports of these magnets triggered supply concerns across industries dependent on them.

Any prolonged disruption could significantly affect Europe’s energy transition. The European Commission has set a target of 60 GW of offshore wind capacity by 2030 and 300 GW by 2050. Each offshore wind turbine requires up to 232 kg of neodymium-praseodymium (NdPr) per megawatt (MW).

By 2030, the European Union is projected to require approximately 13,000 tonnes of magnet for wind turbines alone, and this demand is expected to increase to 69.6 thousand tonnes by 2050, according to industry estimates.

Queries sent to the union ministry of new and renewable energy, the German embassy in New Delhi and Stiftung Offshore Windenergie remained unanswered till press time.

“Although the onshore wind space which is established in India does not require permanent magnets, they are key components of offshore wind turbines. Germany is good in technology, but India is more competitive in terms of skilled manpower and manufacturing. They have been looking at working on offshore wind, and permanent magnet is one of the segments. They would want to know if India can provide a large manufacturing ecosystem,” said Aditya Pyasi, chief executive officer of the Indian Wind Turbine Manufacturers Association (IWTMA).

Pyasi noted that India’s onshore wind turbines primarily use induction motors, but rare earth magnets will play a larger role as the country develops offshore wind capacity due to the efficiency gains they offer. He added that demand from Southeast Asian markets is also significant.

The Indian government plans to develop offshore wind farms along the coastlines of Tamil Nadu and Gujarat. While the sector has yet to attract strong investor interest due to its capital-intensive nature, the Centre aims to install 10 GW of offshore wind capacity—5 GW each in Tamil Nadu and Gujarat.

China shock

India has accelerated efforts to build domestic rare earth magnet manufacturing capacity after China’s surprise export controls announced in April 2025. The move, widely seen as retaliation to high tariffs imposed by the Trump administration, disrupted supplies of magnets used across defence, electronics, renewable energy and automobiles.

Around six months after the export curbs, India announced a ₹7,280-crore incentive package to establish a 6,000-metric-ton domestic rare earth magnet supply by 2030. The plan includes setting up five magnet manufacturing facilities over the next two years, with sales-linked incentives to follow for five years.

Mint has earlier reported that global and domestic players such as Lynas, Iluka, Rainbow, JSW and Bharat Forge have shown interest under the scheme.

India has one of the world’s largest rare earth reserves along its coastline, but China continues to dominate the sector, controlling about 60% of global rare earth mining and 90% of processing capacity. Rare earths are mined, converted into oxides, and then processed into magnets and other products.

India has about 6.9 million tons of rare earths, union minister for information and broadcasting Ashwini Vaishnaw told reporters on 26 November while announcing the incentive package for rare earth magnet making.

While the rare earth magnet package aims to develop a 6,000-tonne capacity in India, the demand for these magnets within the world’s most populous country is about 4,000-5,000 tonnes, according to the government, thereby allowing the industry to cater to the export markets.

Global demand shift

A Council on Energy, Environment and Water (CEEW) report estimates that between 2023 and 2030, demand for Chinese wind energy rare earth permanent magnets (REPMs) may decline by 14% annually for onshore installations, while growing 4% annually for offshore wind.

By 2030, China’s share of global wind energy permanent magnet demand is projected to fall to 19% from 64% in 2023. The wind energy sector outside China will require a cumulative 30,000 tonnes of rare earth materials by 2030, according to CEEW.