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Key Points

The Indian government is set to decide on a rare earth magnet subsidy scheme within 15-20 days to reduce reliance on Chinese imports. A Hyderabad-based company has already committed to producing 500 tonnes by December. The Heavy Industries Ministry is finalizing subsidy details, which may require Cabinet approval if exceeding ₹1,000 crore. India is also exploring alternative suppliers like Japan and Vietnam while ramping up domestic production.

Key Points: Kumaraswamy Says Rare Earth Magnet Subsidy Decision in 15-20 Days

  • Scheme aims to reduce China dependence for EV components
  • Hyderabad firm commits 500-ton production by December
  • Subsidy decision pending Cabinet approval if over ₹1,000 crore
  • India explores Japan, Vietnam as alternate suppliers
3 min read

Govt likely to decide on rare earth magnet subsidy scheme in 15-20 days: Minister Kumaraswamy

India plans rare earth magnet subsidy to cut China reliance, with Hyderabad firm pledging 500-ton production by December.

"One Hyderabad-based company... they are showing interest. They have promised that they will deliver 500 tonnes by this year-end in December. - H.D. Kumaraswamy"

New Delhi, June 24

Union Minister for Heavy Industries and Steel, H.D. Kumaraswamy, said on Tuesday that the government is likely to take a decision within the next 15 to 20 days on launching a subsidy scheme to support domestic production of rare earth magnets.

The scheme is aimed at reducing India's dependence on China for critical components used in electric vehicles and other high-tech industries.

Minister Kumaraswamy revealed that a Hyderabad-based company has already shown interest in the project and has committed to delivering 500 tonnes of rare earth magnets by December this year.

"One Hyderabad-based company... they are showing interest. They have promised that they will deliver 500 tonnes by this year-end in December. We have (had) discussions with the Mines Minister. Our Secretary and our Ministry are working on... ultimately, a decision (will be taken) I think within 15-20 days," the Minister told reporters here.

The Heavy Industries Ministry is currently holding discussions with various stakeholders to determine the level of subsidy to be offered.

According to Kamran Rizvi, Secretary in the Ministry, said that if the total amount of incentives under the scheme goes beyond Rs 1,000 crore, it will need approval from the Union Cabinet.

If the amount remains below Rs 1,000 crore, it can be cleared by the Ministries of Heavy Industries and Finance directly.

He added that the Ministry of Heavy Industries has been working closely with the Ministry of Mines to take the plan forward.

Rare earth magnets, including neodymium-iron-boron, are crucial components in electric vehicle motors, power steering systems, and other advanced automotive applications.

India currently relies heavily on imports for these magnets, especially from China.

However, recent export restrictions imposed by China on key rare earth materials have disrupted global supply chains, affecting industries such as automobiles and semiconductors in countries, including India.

To address this, the Indian government is now considering alternative supply sources and planning to boost domestic manufacturing.

Rizvi said it would take about two years for India to start actual production of rare earth magnets at scale.

In the meantime, the government is exploring alternate procurement options from countries like Japan and Vietnam to prevent shortages.

Indian Rare Earths Limited, a public sector company under the Department of Atomic Energy, currently holds India's primary reserves of rare earth materials.

Officials have confirmed that the company has sufficient stock to produce about 1,500 tonnes of magnets.

Rizvi added that the exact amount of subsidy required under the scheme will only be known after competitive bidding, as different stakeholders have suggested varying levels of support -- ranging from 20 to 50 per cent.

- IANS

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Reader Comments

R
Rahul P.
Finally some concrete steps to reduce our dependence on China! 👏 This is exactly what Make in India should focus on - strategic materials. Hope they finalize the subsidy quickly and ensure transparency in allocation. 500 tonnes by December seems ambitious though - hope they deliver!
P
Priya M.
Good initiative but why only one Hyderabad company? There should be more players involved to avoid monopoly. Also, 2 years for full production is too long - China can create more hurdles by then. Government should fast-track this like we did with vaccines during COVID.
A
Arjun K.
₹1000 crore subsidy is peanuts compared to what China spends on such industries. We need to think big if we want to compete globally. Also, why not involve IITs and research institutions to develop better magnet tech rather than just copying Chinese methods?
S
Sneha R.
As someone working in EV sector, this is welcome news! 🚗⚡ But government must ensure quality standards match global benchmarks. We can't afford substandard magnets that affect vehicle performance. Also hope they consider environmental impact of rare earth mining - sustainability matters!
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Vikram S.
While reducing China dependence is good, we must be careful about subsidies. Remember what happened with solar panel manufacturing? Many companies took subsidies but didn't deliver. Need strict performance clauses and penalties in this scheme.
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Neha T.
Great move! But what about the existing public sector company Indian Rare Earths Limited? They should be leading this initiative instead of relying only on private players. PSUs have the experience and infrastructure - just need proper management and modernization.

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