India-Germany partnership obtained a shot within the arm following German Chancellor Friedrich Merz’s go to final month, his first journey to Asia since taking workplace. Mr. Merz’s assembly with Prime Minister Narendra Modi was adopted by the signing of 19 MoUs and eight key bulletins. Whereas defence and financial co-operation took centre stage, a “Joint Declaration of Intent on Cooperation within the Subject of Vital Minerals” was additionally signed.
China has had a chokehold on the uncommon earths a part of important minerals. Of the 30 important minerals recognized by India, many include rare-earth parts utilized in producing rare-earth everlasting magnets. These are essential in industries resembling electrical mobility, semiconductors, renewable power sector (wind generators), aerospace and defence, amongst others.
India imported over 90% of everlasting rare-earth magnets from China in 2025. China has usually weaponised this dependency. The Indian vehicle trade confronted headwinds in July final yr when China restricted uncommon earths provide following its commerce dispute with the U.S.
Like India, Germany can be closely reliant on China for its provide of rare-earth everlasting magnets. It has been on the lookout for different companions to make its provide chain extra resilient, particularly within the offshore wind power sector.
Offshore wind refers to producing renewable power utilizing wind generators put in in massive our bodies of water, normally within the open sea.
Anindita Sinh, analysis affiliate on the Centre for Social and Financial Progress (CSEP), notes the Joint Declaration on important minerals elevates the Indo-German strategic partnership.
“It builds resilient provide chains via collaborative exploration, R&D, processing, recycling, and joint ventures throughout India, Germany, and third international locations. It additionally seamlessly integrates into sectors resembling defence co-production, inexperienced hydrogen initiatives underneath the Inexperienced and Sustainable Growth Partnership (GSDP), and semiconductor innovation,” Ms. Sinh stated.
Mineral mission
India introduced the Nationwide Vital Mineral Mission (NCMM) in January 2025 to safe its important mineral provide chain. This mission, which can run till 2031, has a price range of $4 billion. In November 2025, the Cupboard accredited ₹7,280 crore (approx. $800 million) to advertise the manufacturing of sintered Uncommon Earth Everlasting Magnets (REPM) with the target of manufacturing 6000 metric tonnes every year of REPM until 2031.
In Union Finances 2026-27, Finance Minister Nirmala Sitharaman additionally introduced a devoted uncommon earth hall that features States resembling Odisha, Kerala, Andhra Pradesh and Tamil Nadu. The thought is to advertise mining, processing, analysis, and manufacturing to scale back India’s dependence on imported rare-earth worth chains.
These initiatives to construct a home uncommon earth provide chain come at a time when Germany and Europe are planning to diversify their reliance on China.
The “Resilience Roadmap for Everlasting Magnets” technique doc, launched in August 2025 by the German Federal Ministry for Financial Affairs and Local weather Motion (BMWK) and the European wind trade, famous that over 90% of the everlasting magnets wanted for wind generators have been sourced from China. The highway map plans to have over 30% of the everlasting magnet provide from exterior China by 2030.
Kira Vinke, head of Heart for Local weather and Overseas Coverage on the German Council on Overseas Relations (DGAP), famous that there could possibly be potential for India because the demand for everlasting magnets is excessive within the offshore wind trade.
“However, European patrons wish to see confirmed dependable outputs at a aggressive value, and it could take a while till the rising Indian magnet trade takes foothold in a method that meets the pursuits of EU patrons,” stated Ms. Vinke.
India is claimed to have the third-largest deposits of uncommon earth parts globally, with 6.9 million tonnes of deposits. Nevertheless, India’s uncommon earths output accounts for lower than 1% of worldwide capability. Most of India’s uncommon earth deposits are positioned round coastal areas within the type of monazite sands and exhausting rock deposits. It’s no coincidence that the uncommon earth hall consists of 4 States lining the jap coast of India.
The uncommon earths deposits in India are primarily based solely on inferred reserves, with out precise geological mapping or mining, notes Ms. Sinh.
“Exploration has been an underfunded sector in India for some time. There was no funding entering into as a result of the capital dangers have been too excessive, primarily because of the inferred reserves. No firm desires to speculate cash after they don’t know whether or not it can truly translate into revenue. Making a mine commercially viable in India takes some time,” Ms. Sinh stated. Moreover, many of those rare-earth deposits in coastal areas are related to radioactive parts like thorium, which provides one other layer of complexity.
Space of curiosity
One space that’s bringing the 2 international locations to not simply discover partnerships within the uncommon earth magnets sector, but additionally to scale up its renewable power ambitions is the wind power sector.
A German delegation led by Johann Saathoff, Parliamentary State Secretary within the Federal Ministry for Financial Cooperation and Growth, visited India in November 2025. In the course of the go to, early-stage discussions on potential collaboration to fabricate rare-earth magnets additionally befell. The go to coincided with the Windergy India 2025 convention, which focuses on wind power and wind turbine makers.
Wind generators want over 200 kg of everlasting rare-earth magnets per MW of generated power. With 90% of the magnet provide coming from China, each international locations are susceptible to fulfilling their 2030 wind power ambitions – 107 GW for India and 145 GW for Germany.
The German Offshore Wind Power Basis (SOW) signed an MoU with the Indian Wind Turbine Producers Affiliation to cooperate on offshore wind growth, expertise switch and coverage dialogue.
Know-how switch is essential as India doesn’t at present have offshore wind power set up. The Ministry of New and Renewable Power has recognized round 70 GW of potential offshore wind capability round Tamil Nadu and Gujarat. Germany has 9.2 GW of put in offshore wind capability.
Karina Wuertz, managing director of the Offshore Wind Power Basis, believes India may turn into a dependable accomplice for Germany in everlasting magnets.
“There’s a variety of uncommon earths the place the German trade (not solely offshore wind) must diversify its suppliers. Particularly concerning offshore, we see tangible advantages each for the German (i.e. engineering consulting companies) in addition to for the Indian aspect (i.e. part manufacturing),” Ms. Wuertz stated.
On January 26, Germany, together with 9 different European nations, signed the Hamburg Declaration, which commits to 100 GW of joint offshore wind tasks within the North Sea.
“The Declaration focuses on resilient provide chains and India may play a rising position going ahead,” Ms. Vinke stated.
“There’s additionally a push in Europe to purchase European, however particularly concerning uncommon earth and everlasting magnet provide chains, India’s bulletins of the uncommon earth hall and the everlasting magnets manufacturing programme are attracting a number of curiosity. Importantly, this roll-out must occur quick, requires workforce coaching and in addition technical cooperation,” Ms. Vinke stated.
Germany’s offshore wind capability stood at 9.2 GW on the finish of 2024, and it goals to scale it to 30 GW by 2030 and 40 GW by 2035.
Ms. Wuertz notes that that is an formidable quantity that won’t be achievable. “The issues with reaching the German offshore wind set up targets are rooted in a structural misfit of the auctioning design in addition to in an issue on the interface between authorized grounds and spatial planning by the related authorities,” Ms. Wuertz stated.
Moreover, there was no implementation of the offshore set up targets with industrial coverage measures, together with financing, Ms. Wuertz stated.
Ms. Vinke additionally famous that it’s an open query how the upper prices of extra diversified provide chains could possibly be accounted for. “This boils right down to the purpose whether or not firms and customers are keen and capable of pay a safety premium to have extra numerous sources for his or her merchandise, and doubtlessly additionally extra sustainably sourced materials,” Ms. Vinke stated.
The German Offshore Wind Power Basis plans to sponsor research on the scalability of everlasting magnets manufacturing in India. “The inspiration will achieve this so long as public funding by the German authorities is supplied,” Ms. Wuertz stated.
Know-how switch is an space ripe for collaboration within the uncommon earths sector as nicely. “I feel many of the potential for India and the EU to accomplice could be on the downstream, on the refining processing, recycling of uncommon earths, and in addition taking a look at different applied sciences that won’t have us sure to those minerals as such,” Ms. Sinh stated.
Nevertheless, Chinese language dominance within the uncommon earths sector will proceed for a few years to come back, in keeping with a number of trade consultants.
“The aim is extra to scale back this dependency reasonably than turning into absolutely unbiased,” Ms. Vinke.