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India is preparing almost to triple the size of its schemes for rare-earth magnet manufacturing, targeting an outlay of more than Rs 7,000 crore ($788 million) as it seeks to build home-grown capacity in a field long dominated by China. The proposal, still awaiting cabinet approval, marks a dramatic jump from the earlier plan of $290 million, according to people familiar with the matter, according to a Bloomberg report citing people familiar with the matter. The drive comes amid mounting concern over global supply disruptions. China processes about 90 per cent of the world's rare-earth magnet output, and its export curbs in April rattled industries worldwide. India is now racing to position itself in sectors such as EVs, renewables and defence by securing access to the critical materials and technology it currently lacks. Earlier this year, Prime Minister Narendra Modi warned that “critical minerals should not be weaponised”, underscoring the urgency of supply-chain diversification. Key Challenges: From Technology To Timeline While the ambition is clear, several obstacles loom. Domestic production remains non-viable without subsidies, state-owned firms currently lead the drive, and know-how remains heavily concentrated in China, the report added. The proposed initiative will support around five companies via production-linked and capital subsidies. Meanwhile, India must contend with limited funding, expertise and long gestation periods. A spokesperson for the Ministry of Heavy Industries, which did not immediately respond to a request for comment, noted in the Bloomberg report that studies are being funded into alternate technologies such as synchronous-reluctance motors “that could eventually reduce dependence on rare-earth materials”. What’s Next For India’s Rare-Earth Play The government is hoping this open-ended boost will draw global magnet-makers to establish local subsidiaries or joint ventures, thereby reducing reliance on Chinese imports backed by opaque subsidies and aggressive pricing, states the report. However, even if India rolls out the full incentive programme, the very same Chinese easing of export curbs to the US and EU could undermine the local investment case. In other words, if Chinese magnets become cheaper and more accessible globally, India’s nascent sector may face stiff headwinds.
