Rare earth magnet making to get a ₹1,345 crore govt push
The subsidy scheme is being discussed by various ministries, heavy industries minister H.D. Kumaraswamy said, adding the final proposal will be sent to the Union cabinet.
"We have sent the first outline for inter-ministerial consultation," Kumaraswamy said in response to a query about rare earth magnets.
Mint had reported on 17 June that an incentive programme for processing rare earth oxides and producing permanent magnets was in the works.
Heavy industries secretary Kamran Rizvi said that incentives will be given to two manufacturers who can process rare earth magnets from rare earth oxides. The scheme will be for end-to-end processing of rare earth magnets, he said.
The scheme comes as a response to an export control order issued by the Chinese commerce ministry in April, which led to a massive supply crunch of rare earth magnets widely used in electronic gadgets, automobiles and heavy machinery.
China commands 90-95% of the world's rare earth metal processing capacity, allowing it to use its exports to its own advantage. Rare earth elements and their products are used in strategic sectors such as renewable energy, clean mobility and electronics.
India has also flagged the disruption of supply chains on the global stage. Prime Minister Narendra Modi said on 7 July at the 17th Brics conference that making critical mineral supply chains reliable is critical, and that no one country uses these resources for its own selfish gains or as a weapon against others.
"We need to work together to make supply chains for critical minerals and technology secure and reliable. It's important to ensure that no country uses these resources for its own selfish gain or as a weapon against others," Modi had said.
India is also part of the Quad Critical Minerals Initiative, where the US, Australia, Japan and India have pledged to work together to secure and diversify supply chains on 2 July.
IREL, a state-owned company, is the sole refiner of rare earths in India, with a capacity to make about 1,500 tonnes of rare earth magnets a year.
Mint reported on 24 June that the government had received proposals during consultations with stakeholders for funding about 20-50% of the cost of processing rare earths to make magnets.
'Rare earths are relatively abundant in the earth's crust, but mineable concentrations are less common than for most other mineral commodities,' said the 2025 US Geological Survey, adding that substitutes to rare earths are available for many applications but generally are less effective.
Rare earth magnets, such as neodymium-iron-boron, are used in advanced automotive applications. They are essential components in traction motors for electric vehicles, and in power steering motors in passenger vehicles for both electric and fossil fuel-based vehicles.
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