India Gears Up for Domestic Rare Earth Magnet Production

The Indian government is taking significant steps to reduce dependency on Chinese supply chains by initiating fiscal incentives aimed at promoting domestic production of rare earth magnets. Union Minister H D Kumaraswamy highlighted the critical need for rare earth materials, particularly in the electric vehicle sector, and the disruptions caused by the current reliance on China.

Addressing a gathering at ACMA's annual session, Kumaraswamy announced that a comprehensive scheme is being developed to support the industry's capital and operational expenditures. This scheme will help bridge financial gaps, offer relief from high tariffs on essential equipment, and maintain the continuity of supply chains, especially against the backdrop of increasing global trade restrictions.

With a budgetary plan set at Rs 1,345 crore, targeted incentives will be provided, focusing initially on two select manufacturers. This subsidy aims to bolster the establishment of processing facilities to convert rare earth oxides into valuable magnets, helping ensure India's significant role in global value chains and reducing the impact of sudden supply chain disruptions.

(With inputs from agencies.)