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ReutersA sample of bastnaesite ore, a mineral containing rare earth elements, is displayed in Beijing. India plans to almost triple the size of its incentive program for rare earth magnet manufacturing to more than Rs 7,000 crore ($788 million) as it races to build domestic capacity in a sector dominated by China, according to people familiar with the matter.The proposal, awaiting cabinet approval, represents a significant step-up from an earlier $290 million plan aimed at securing critical materials for electric vehicles, renewable energy and defence, the people said, asking not to be identified as the information isn’t public. The final allocation could still change, they said.India is joining several nations in accelerating efforts to develop a supply chain for rare earth magnets after China — which processes about 90% of global output — tightened export controls in April amid its trade dispute with the US, disrupting supplies for automakers worldwide. Earlier this year, Prime Minister Narendra Modi warned that critical minerals should not be weaponized, while calling for stable, diversified global supply chains.The South Asian nation’s rare earth expansion plan aligns with global efforts to reduce reliance on China, but faces challenges from limited funding, expertise, and long project time lines. With domestic production still nonviable without subsidies, state-owned firms are leading early efforts to secure overseas mining partnerships. Bloomberg Also, the technological know-how for now stays heavily concentrated in China. Mining rare earths economically is another challenge and often poses environmental risks due to their association with radioactive elements.Live EventsThe government initiative will support about five companies through a mix of production-linked and capital subsidies, according to the people. China has recently issued the first licenses allowing imports of rare earth magnets for use in India, but none have been granted to Indian-origin firms, they said.A spokesperson for the Ministry of Heavy Industries didn’t immediately respond to a request for comment made Sunday.Magnet-FreeThe government is also funding studies on the so-called synchronous reluctance motors, a technology that could eventually reduce dependence on rare earth materials, according to the people.Several overseas suppliers have expressed interest in providing rare earth materials to India, whose projected annual demand of about 2,000 tons of oxides can be easily met by global producers, they said.India is betting the expanded program will draw global magnet makers to set up local subsidiaries or joint ventures, cutting its reliance on Chinese imports long backed by opaque subsidies and aggressive pricing.The plan could face headwinds if China’s recent easing of export curbs for the US and European Union is extended to India. That could make Chinese magnets cheaper and more accessible globally, potentially deterring long-term investment in India’s nascent sector.Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) Read More News onIndia rare earth magnet manufacturingindia rare earth incentiveindia rare earthrare earthrare earth magnet (Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online....moreless (You can now subscribe to our Economic Times WhatsApp channel)Read More News onIndia rare earth magnet manufacturingindia rare earth incentiveindia rare earthrare earthrare earth magnet(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online....moreless
