New Delhi
Union Minister for Heavy Industries and Steel, H.D. Kumaraswamy, said on Tuesday that the government may decide within 15 to 20 days on launching a subsidy scheme to promote domestic production of rare earth magnets. These magnets are vital for electric vehicles (EVs) and other advanced technologies, and the scheme aims to cut India’s reliance on Chinese imports.
A Hyderabad-based company has already shown interest and pledged to deliver 500 tonnes of rare earth magnets by December 2025, Kumaraswamy noted. He said discussions have taken place with the Mines Ministry, and his department is actively working on the proposal.
Secretary Kamran Rizvi added that if the scheme’s incentives cross ₹1,000 crore, Cabinet approval would be needed. If not, the Ministries of Heavy Industries and Finance can approve it directly. He mentioned that the Ministry of Heavy Industries is coordinating with the Ministry of Mines to move the plan forward.
Rare earth magnets like neodymium-iron-boron are essential in EV motors and power steering systems. With China imposing restrictions on rare earth exports, global supply chains have been impacted, including in India.
To avoid shortages, India is also exploring alternate suppliers such as Japan and Vietnam. Rizvi stated that actual domestic production at scale may take around two years.
Currently, Indian Rare Earths Limited, under the Department of Atomic Energy, holds the country’s main rare earth reserves and has enough material to produce around 1,500 tonnes of magnets.
The final subsidy amount will depend on competitive bidding, with proposed support levels ranging from 20% to 50%, based on stakeholder inputs.