Pulling Toward Progress: Rare Earth Magnet Scheme Nears Green Light

The Indian government will soon ink a subsidy scheme to increase domestic production of rare earth magnets within the next 15-20 days, Union Minister H.D. Kumaraswamy stated. The move will bring an end to India's dependence to a large extent on China for crucial components used in electric vehicles, automobiles, and semiconductor sectors.

 

Key Highlights:

 

One of the Hyderabad-based firms has expressed interest and has pledged to provide 500 tonnes of rare earth magnets in December 2025 and hopes to ramp up its production to 5,000 tonnes next year.

 

The Ministry of Heavy Industries was negotiating with the stakeholders to conclude subsidization quantum, ranging from 20% to 50% in proposals.

 

If the overall size of the subsidy exceeds ₹1,000 crore, the scheme will be subject to approval by the Union Cabinet; otherwise, it may be approved by the Heavy Industries and Finance ministers.

 

India is also considering short-term sourcing from Vietnam and Japan to offset supply disruptions.

 

The strategy will push investment into value-added processing plants to process rare earth oxides into magnets, enhancing the national supply chain.

 

Prospects: While China's export bans disturb international supply chains, India's subsidy scheme will be a game-changer in procuring strategic raw materials for its expanding EV and tech industries. The initiative will stimulate production locally, reduce reliance on imports and strengthen India's position in the global rare earth market.

 

Sources: Economic Times, Outlook Business, The Hindu Businessline, Financial Express