A decision on a financial support program aimed at boosting the domestic manufacturing of rare earth magnets is expected within 15 to 20 days, according to Heavy Industries and Steel Minister HD Kumaraswamy. Officials are currently engaging with industry players to determine the amount of support that will be offered. If the proposed benefits exceed ₹1,000 crore, the matter will be escalated to the Union Cabinet, said Kamran Rizvi, Secretary of the Ministry of Heavy Industries.
“One company based in Hyderabad has shown strong interest in the initiative. They’ve committed to delivering 500 tonnes by December this year. Our ministry is coordinating closely with the Mines Ministry, and we expect to reach a final decision within the next two to three weeks,” Mr Kumaraswamy told reporters.
Recent trade restrictions imposed by China on the export of critical metals have disrupted global supply chains, particularly in the automotive and semiconductor sectors, with India among the affected countries. Mr Rizvi noted that actual domestic production of rare earth magnets would take roughly two years to begin. In the meantime, the government is exploring other supply options from countries like Japan and Vietnam.
“Japan and Vietnam have reserves of rare earth materials. We’re actively pursuing procurement from these regions,” Mr Rizvi added. Rare earth magnets, particularly those made from neodymium, iron, and boron (NdFeB), are essential for a range of advanced automotive applications, including electric vehicle motors and power steering systems in both electric and traditional vehicles.
The proposed financial package is intended to help companies invest in infrastructure needed to process rare earth oxides into magnets. Officials mentioned that Indian Rare Earths Ltd, a public sector unit under the Department of Atomic Energy, holds enough raw material to support production of approximately 1,500 tonnes of magnets.
Mr Rizvi clarified that whether Cabinet approval is needed depends on the final value of the proposed incentives. “If the total stays below ₹1,000 crore, the decision can be made by the ministers of heavy industries and finance. If it surpasses that figure, it must go to the Cabinet.”
He added that discussions with industry representatives have revealed differing expectations, with some suggesting a 50% subsidy and others proposing 20%. A competitive bidding process is expected to determine the final figures. In the meantime, about 30 automotive companies have recently applied to the Directorate General of Foreign Trade for permission to import rare earth magnets from China, in an effort to prevent potential disruptions to manufacturing due to current supply constraints.
