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A scheme worth ₹1,345 crore has been proposed by the Centre that will help step-up production of rare earth magnets in India, especially in the wake of China’s restrictions on their export that has hit India’s EV, auto, electronics makers and semiconductor chips makers.

The Union Heavy Industries Minister, HD Kumaraswamy said on Friday that inter-ministerial consultations on the scheme were underway for two select manufacturers to be given incentives and end-to-end support for conversion of rare earth oxides into magnets. 

The subsidy will facilitate investment for establishing processing facilities for companies to convert rare earth oxides into magnets. Indian Rare Earth Magnets Ltd, a PSU under the Ministry of Atomic Energy, is the sole repository of rare earths in India.

India has the fifth-largest rare earth reserves globally, estimated at 6.9 million metric tonnes. They are primarily found in monazite sands along the Indian coastline and inland deposits in states like Jharkhand and West Bengal. 

However, despite having significant reserves, India's current rare earth production is limited, with only 2,900 metric tonnes produced in 2023, according to the Indian Council of World Affairs (ICWA). 

 

Also Read: China’s loss may be Australia’s gain in rare earth supply

“(The) ₹1,345 crore scheme has (proposed) two manufacturers,” Kumaraswamy said in response to a query while addressing a press conference here.

After the completion of the consultations, the proposal may be sent to the Union Cabinet for approval.

Meanwhile, Kamran Rizvi, secretary in the heavy industries ministry, said that they will give the incentive to anyone who can give them magnets.

“We are interested in magnets. Anybody who gives us magnets, will get the incentive. This scheme is the first outline we have sent for inter-ministerial consultation. It is proposed that there will be two manufacturers,” Rizvi informed.

Rare earth magnets include neodymium-iron-boron (NdFeB). It is used for high-performance automotive applications such as traction motors in electric vehicles (two-wheelers and passenger vehicles) and power steering motors (in passenger vehicles) in both electric vehicles and internal combustion engine vehicles.