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Key Points

The Indian government has set aside Rs 1,345 crore to incentivize rare earth magnet production, addressing global supply shortages. Minister HD Kumaraswamy confirmed the subsidy scheme is in progress, with manufacturers soon to be selected. China’s export restrictions on rare earth metals have heightened global supply concerns, pushing India to seek alternatives. The move aligns with India’s National Critical Mineral Mission to reduce reliance on foreign suppliers.

Key Points: Kumaraswamy Announces Rs 1,345 Crore Rare Earth Magnets Incentive

  • Rs 1,345 crore subsidy to boost domestic rare earth magnet production
  • Scheme under inter-ministerial consultation for manufacturer selection
  • China’s export controls trigger global supply concerns
  • India’s Critical Mineral Mission aims to reduce foreign dependency
2 min read

Rs 1,345 crore allocated to incentivise rare earth magnets production: Minister Kumaraswamy

India allocates Rs 1,345 crore to boost rare earth magnet production amid global shortages, reducing reliance on China.

"We are interested only in magnets. Anybody who gives us magnets will get incentives. – Kamran Rizvi"

New Delhi, July 11

The central government has earmarked Rs 1,345 crore to incentivise rare earth magnets production in India, aimed at building domestic capacity when there are reports of global short supply.

"Some progress is going on (on the rare earth magnet production front). We have already allocated Rs 1,345 crore (for subsidy). We are on course to select the manufacturers," Minister for Heavy Industries HD Kumaraswamy told reporters at a press conference Friday.

Heavy Industries Secretary Kamran Rizvi, accompanying the minister, said the scheme has been circulated and it is currently under inter-ministerial consultation.

"We are interested only in magnets. Anybody who gives us magnets will get incentives," the top official said.

It is expected that there will be at least 2 manufacturers who will participate in this program.

Early this April, China announced a decision to implement export controls on certain rare earth-related items, pushing a supply shortage across the world, including India.

Meanwhile, India is in touch with the Chinese side, seeking predictability in the supply of rare earth metals -- which had been put under the export controls regime by the Xi administration.

China's overwhelming control of global rare earth processing - commanding over 90 per cent of the world's magnet production capacity - has created significant vulnerabilities for industries worldwide. These materials are critical across multiple sectors, including automobiles, home appliances, and clean energy systems.

Beyond China, there are only a few alternative suppliers of critical minerals.

Finance Minister Nirmala Sitharaman announced the setting up of the Critical Mineral Mission in the Union Budget for 2024-25 on July 23, 2024. The Union Cabinet in January 2025 approved the launch of the National Critical Mineral Mission (NCMM) with an expenditure of Rs 16,300 crore and an expected investment of Rs 18,000 crore by Public Sector Undertakings.

Recently, Union Minister for Coal and Mines G Kishan Reddy said the central government is actively encouraging private companies to mine and explore critical minerals overseas and bring them back into the country to serve the needs of the domestic industry.

- ANI

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Reader Comments

P
Priya S
Good initiative but Rs 1,345 crore seems quite small compared to the scale of the challenge. China dominates this sector completely. We need much larger investments and long-term vision to compete.
R
Rohit P
This is crucial for our EV and renewable energy sectors! Rare earth magnets are the backbone of modern tech. Hope private players like Tata and Reliance jump into this space quickly.
S
Sarah B
As someone working in manufacturing, I can say this is long overdue. We've been struggling with unreliable supply chains. Hope the government ensures proper environmental safeguards too - rare earth mining can be very polluting.
V
Vikram M
China has been using rare earth exports as political leverage for years. Better late than never that we're acting on this. But why only 2 manufacturers? Should encourage more competition in this space.
K
Kavya N
The Rs 16,300 crore Critical Mineral Mission sounds promising! We need to secure our supply chains across all strategic minerals. This is national security as much as economic policy.

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