Rare Earth Magnet Production: Govt to Announce Subsidy Scheme in the Next 15–20 Days, Says Kumaraswamy

India is nearing a subsidy scheme for rare earth magnet production. With China curbing exports, the government is pushing to boost local manufacturing and cut imports.

Rare Earth Magnet: China’s Export Curbs Prompt Urgent Domestic Measures

Recent restrictions imposed by China on the export of key rare earth metals have disrupted the manufacturing dynamics of various industries, from automotive to semiconductors. India, like several other nations, has felt the squeeze in supply chains reliant on neodymium-iron-boron (NdFeB) magnets, used extensively in electric vehicles and conventional automotive components such as power steering.

15–20 Day Window to Finalise Scheme Details

Union Minister H D Kumaraswamy confirmed that a decision will be taken within the next 15 to 20 days regarding the structure of the subsidy scheme. Consultations are ongoing with stakeholders to determine the ideal quantum of incentives required to attract investment. A Hyderabad-based firm has committed to delivering 500 tonnes of magnets by December, indicating early industry interest.

Conditional Cabinet Approval Based on Incentive Size

As per Kamran Rizvi, Secretary in the Heavy Industries Ministry, Cabinet approval will be necessary only if the proposed incentives exceed ₹1,000 crore. If below this threshold, the finance and heavy industries ministries can proceed with approvals directly. Current stakeholder feedback varies widely, with demand ranging anywhere from 20% to 50% support levels.

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Supply Chain Alternatives in Focus

Given the expected 2-year timeline for domestic production to ramp up, interim procurement will rely on sourcing from alternative countries, including Japan and Vietnam. Exploratory arrangements are actively being assessed to ensure stability in supply during the developmental phase of indigenous production.

Current Capacities and Industrial Readiness

Indian Rare Earths Ltd, under the Ministry of Atomic Energy, holds reserves adequate to produce up to 1,500 tonnes of magnets. The proposed subsidy aims to facilitate the transition from oxide processing to finished magnet production and attract private enterprises into this strategically critical sector.

Conclusion

India’s fast-tracked subsidy initiative is a direct response to global material constraints and the country’s broader ambitions of becoming self-reliant in crucial supply chains. The upcoming decision within 15–20 days is expected to pave the way for long-term stability and innovation in rare earth magnet manufacturing.

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