(MENAFN) India is preparing to significantly enhance its domestic rare-earth manufacturing incentive program, with plans to nearly triple its current size, according to a media outlet, citing government officials.

The proposed expansion will increase the program’s value to approximately $788 million, as India seeks to challenge China’s dominance in the rare-earth sector.

This proposed package, which still awaits final approval, represents a major increase from the original allocation of $290 million, as mentioned in the report.

If the plan is approved, it will significantly strengthen India’s efforts to secure critical materials needed for key industries such as electric vehicles, renewable energy, and defense.

This move comes in the wake of growing tensions in the rare-earth market, which have escalated after China imposed restrictions on the export of rare-earth metals.

These minerals are vital for industries like defense, electronics, and electric vehicle batteries, and their importance has placed them at the heart of a trade dispute involving the United States, European Union, and China.

In April, Beijing first introduced export controls on certain rare-earth elements critical for military use, citing national security concerns and the need to safeguard strategic resources.

In October, these restrictions were expanded, with China imposing stricter licensing requirements and extraterritorial measures that particularly affect exports related to the U.S. defense and semiconductor industries.

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