(MENAFN) India is set to significantly increase its incentives for domestic rare-earth production, with plans to nearly triple the current funding, a media outlet has reported, citing government officials.

The incentive program, aimed at reducing the country's reliance on imports, is expected to grow to around $788 million as India seeks to compete with China's control over this critical sector.

The expansion of the program, which is still awaiting approval, marks a sharp rise from the original allocation of $290 million.

If approved, the new incentives would provide a major boost to India’s strategic push to secure vital resources needed for industries such as electric vehicles, renewable energy, and defense.

The initiative comes amid increasing concerns over global supply chains for rare-earth materials, which are essential in producing electronics, military equipment, and batteries for electric vehicles.

The move by India follows heightened tensions in the rare-earth market after China imposed export restrictions on these materials.

Rare-earth metals have become a focal point of a trade dispute between the United States, European Union, and China.

Beijing initially imposed export controls on specific rare-earth elements critical for military use in April, citing national security risks and the need to safeguard strategic resources.

In October, these restrictions were expanded to include stricter licensing procedures and extraterritorial provisions, particularly affecting the US defense and semiconductor industries.

However, following discussions between US President Donald Trump and Chinese President Xi Jinping in South Korea last week, Beijing agreed to pause the latest rare-earth export controls for one year.

This suspension was granted in exchange for corresponding cuts in US tariffs and restrictions.

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