India Plans Incentives To Boost Domestic Rare Earth Magnet Production Amid Supply Shortages

(MENAFN- KNN India) New Delhi, Jun 6 (KNN) India is taking proactive measures to address the growing concern over its dependence on China for rare earth magnets, essential components in electric vehicles (EVs), renewable energy systems, and defence technologies.

In response to China's export restrictions imposed in April 2025, the Indian government is drafting a plan to offer financial incentives to companies engaged in domestic production of rare earth magnets.

The Ministry of Heavy Industries is considering production-linked incentives and potential subsidies to bridge the price gap between Indian-made magnets and cheaper Chinese imports.

This initiative aims to gradually build a domestic supply chain and reduce reliance on imports. While the plan is still in the drafting stage, officials are expected to meet with industry representatives soon to discuss the details.

Despite possessing significant reserves of rare earth elements, India's current production capacity is insufficient to meet the growing demand.

The country has the world's third-largest reserves of rare earth elements, approximately 6.9 million tonnes.

However, limited private investment in mining and processing has hindered the development of a robust domestic supply chain.

The government's National Critical Mineral Mission, launched in April 2025, aims to enhance self-reliance in strategic minerals like neodymium, a key component in magnets used in EVs.

Exploration efforts have begun, but due to a lack of processing facilities, India currently exports some of this material to Japan.

In the short term, the government is planning to send a delegation of auto industry leaders to China to request faster export clearances.

This move underscores the urgency of securing a stable supply of rare earth magnets to prevent potential disruptions in the automotive sector.

(KNN Bureau)

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