Union Minister for Heavy Industries and Steel, H.D. Kumaraswamy, said on Tuesday that the government is likely to take a decision within the next 15 to 20 days on launching a subsidy scheme to support domestic production of rare earth magnets.
The scheme is aimed at reducing India's dependence on China for critical components used in electric vehicles and other high-tech industries.Minister Kumaraswamy revealed that a Hyderabad-based company has already shown interest in the project and has committed to delivering 500 tonnes of rare earth magnets by December this year.
"One Hyderabad-based company... they are showing interest. They have promised that they will deliver 500 tonnes by this year-end in December. We have (had) discussions with the Mines Minister.
Our Secretary and our Ministry are working on... ultimately, a decision (will be taken) I think within 15-20 days," the Minister told reporters here. The Heavy Industries Ministry is currently holding discussions with various stakeholders to determine the level of subsidy to be offered.
According to Kamran Rizvi, Secretary in the Ministry, said that if the total amount of incentives under the scheme goes beyond Rs 1,000 crore, it will need approval from the Union Cabinet. If the amount remains below Rs 1,000 crore, it can be cleared by the Ministries of Heavy Industries and Finance directly.
He added that the Ministry of Heavy Industries has been working closely with the Ministry of Mines to take the plan forward. Rare earth magnets, including neodymium-iron-boron, are crucial components in electric vehicle motors, power steering systems, and other advanced automotive applications.India currently relies heavily on imports for these magnets, especially from China.
However, recent export restrictions imposed by China on key rare earth materials have disrupted global supply chains, affecting industries such as automobiles and semiconductors in countries, including India.
To address this, the Indian government is now considering alternative supply sources and planning to boost domestic manufacturing. Rizvi said it would take about two years for India to start actual production of rare earth magnets at scale.
In the meantime, the government is exploring alternate procurement options from countries like Japan and Vietnam to prevent shortages. Indian Rare Earths Limited, a public sector company under the Department of Atomic Energy, currently holds India's primary reserves of rare earth materials.
Officials have confirmed that the company has sufficient stock to produce about 1,500 tonnes of magnets. Rizvi added that the exact amount of subsidy required under the scheme will only be known after competitive bidding, as different stakeholders have suggested varying levels of support -- ranging from 20 to 50 per cent.