Inter-ministerial consultations are currently underway regarding a proposed Rs 1,345 crore incentive scheme aimed at subsidising the production of rare earth magnets within India. The scheme envisages extending financial support to two selected manufacturers, Union Heavy Industries Minister H D Kumaraswamy stated on Friday.
This initiative has been prompted by China’s recent restrictions on the export of rare earth magnets, which have significantly disrupted global supply chains, adversely affecting electric vehicle manufacturers, including those in India. The proposed scheme seeks to provide comprehensive support covering the entire process from rare earth oxide conversion to the production of finished magnets.
Upon completion of inter-ministerial consultations, the proposal is expected to be submitted to the Union Cabinet for approval, sources indicated. “The Rs 1,345 crore scheme proposes incentives for two manufacturers,” Mr Kumaraswamy remarked during a press conference.
Kamran Rizvi, Secretary of the Heavy Industries Ministry, confirmed that the scheme outlines end-to-end support for two manufacturers engaged in the conversion of rare earth oxides into magnets, and is presently under inter-ministerial review.
“Our focus is on magnet production. Manufacturers supplying magnets will be eligible for incentives. This preliminary proposal has been circulated for inter-ministerial consultation and is designed to support two manufacturers,” Mr Rizvi added.
The proposed subsidy will facilitate investments in establishing processing facilities required for the conversion of rare earth oxides into magnets. Indian Rare Earth Magnets Ltd, a public sector undertaking under the Ministry of Atomic Energy, remains the sole custodian of rare earth materials in India. China’s recent export limitations on critical metals have caused considerable disruption in the manufacturing sectors of automobiles and semiconductor chips across multiple countries, including India.
Rare earth magnets, notably neodymium-iron-boron (NdFeB), are essential components for high-performance automotive applications such as traction motors in electric vehicles (both two-wheelers and passenger vehicles) and power steering motors used in electric as well as internal combustion engine vehicles.
