Govt Plans Rs 1,000 Cr Scheme To Boost Rare Earth Magnet Manufacturing Amid Chinese Supply Constraints

(MENAFN- KNN India) New Delhi, Jun 26 (KNN) In response to China's tightening grip on rare earth magnet exports, the Indian government is preparing to launch a Rs 1,000-crore incentive scheme aimed at bolstering domestic manufacturing of these critical components.

The Ministry of Heavy Industries is expected to announce the scheme within the next two weeks, in collaboration with Indian Rare Earths Limited (IREL).

Rare earth magnets are vital for a range of strategic industries, including electric vehicles, electronics, and defence.

India currently depends heavily on imports from China, but recent Chinese restrictions-limiting exports to state-controlled channels-have raised concerns about supply disruptions.

While the Ministry has confirmed that there have been no production stoppages so far, the government is moving proactively to reduce this vulnerability.

Under the new scheme, financial incentives will be extended to magnet manufacturing units to scale up local production.

More than five companies have already expressed interest and are in discussions with the Ministry.

IREL, which currently supplies rare earth raw materials, is expected to support the scheme by providing up to 500 tonnes of input materials.

India reportedly holds adequate reserves of rare earth minerals, with an estimated total mineral capacity of 13 million tonnes-6.9 million tonnes of which are rare earth elements.

However, many domestic magnet producers are operating at just half their potential capacity due to limited access to raw materials and inadequate policy support.

The government is also exploring alternate sourcing routes, including imports from Japan, though Japanese supplies are costlier compared to Chinese exports.

Arjun Bajaj, Director, television manufacturer Videotex, said,“Rare earth magnets are crucial in TV manufacturing due to their compact size and high performance, especially in speaker production. Since we rely heavily on imports, this is clearly becoming a challenge. We are working closely with our suppliers to ensure adequate stock for the upcoming season so that production remains uninterrupted.”

Videotex manufactures televisions for over 25 brands, including Lloyd (Havells), BPL and Reconnect (Reliance Group), Toshiba, and Vijay Sales.

The company's concerns echo a broader sentiment across India's manufacturing landscape, where magnet shortages threaten to constrain future growth unless immediate remedial steps are taken.

(KNN Bureau)

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