India Government is going to boost Rare Earth Magnet Production – Subsidy Policy will be finalized in 15-20 days
After facing problems in import from China, India is planning to develop its own rare earth magnet industry.
Amidst the problems in import of rare earth magnets, the Indian Government is working on a new policy which will boost domestic processing through subsidy. Heavy Industries Minister H.D. Kumaraswamy said on Tuesday that this incentive policy will be finalized in the next 15-20 days.
He said, “Discussions are going on with the Ministry of Mines. Both ministries are working on a policy of incentives for rare earth magnet processing. A decision is expected in 15-20 days.”
Import from China a big challenge
Rare earth magnets, which are used in electric vehicles (EVs), automation and high-efficiency motors, are a very important component. But China controls almost 90% of the refining capacity in this area, and 60% of the world’s rare earth elements are produced there.
In April 2024, China made export rules more strict. Now it is necessary to obtain an import permit to import any rare earth magnet or element. This includes declaration of military use, approvals from multiple Indian ministries, clearance from Chinese embassy, and finally export clearance from Chinese authorities. Due to this complex process, import applications of more than 30 Indian companies were pending in China till the second week of June.
India’s Strategy – Boosting Local Manufacturing
The government is now planning subsidies and incentives for rare earth magnet processing to break this monopoly and build self-reliance. According to Kamran Rizvi, Secretary, Ministry of Heavy Industries, “Stakeholder consultations are going on. Some want 50% subsidy, some want 20%. This will be finalised through a competitive bid.”
He said that the cost of making magnets from rare earth oxide is quite high in India, while China keeps the price of magnets low due to its monopoly. The price difference between rare earth oxides and magnets in Shanghai stock exchange is only 5%.
Preparation for domestic production – Hyderabad company comes forward
A Hyderabad-based company, probably named Midwest Advanced Materials, has shown interest in magnet production. They have committed to supply 500 tonnes of magnets by the end of this year, and will increase the capacity to 5,000 tonnes by 2026.
On the other hand, Indian Rare Earths Limited (IREL) – a PSU that mines and refines rare earth – has so much material that it can make 1,500 tonnes of magnets every year.
Alternative supply from Japan and Vietnam
Officials say rare earth oxides are also available in Japan and Vietnam, and imports from them are also being explored to reduce dependency on China.
This move is crucial for the auto industry
Rare earth magnets are critical in EVs and high-tech components – these magnets are essential for delivering high performance in small size, increasing energy efficiency and smooth functioning in digital systems.
India’s rare earth magnet and alloy import figure from China in 2024 was 2,850 tonnes, making it the world’s 5th largest importer. In this backdrop, the plan to boost local production is important from both strategic as well as economic angles.
Conclusion:
India’s focus is now not just on imports but on global competitiveness in rare earth magnet production through Make in India. After the policy is finalised in the next few days, it will be seen what level of subsidy domestic manufacturers can attract. This will not only support the automotive sector but will also make it possible for India to emerge as a strong alternative in the global supply chain.