New Delhi: In response to China’s recent export restrictions on critical minerals, India is actively negotiating rare earth imports with Japan and Vietnam while preparing to launch a domestic incentive scheme to process rare earth oxides into magnets. The proposed scheme is expected to be finalized within the next 15 to 20 days, according to Union Heavy Industries and Steel Minister H. D. Kumaraswamy.
The government aims to reduce dependence on China for rare earths, which are vital for sectors like electric mobility, electronics, and defense. Discussions are ongoing with stakeholders to determine the level of subsidy that will be offered to promote the local production of rare earth magnets.
“If the total incentive exceeds ₹1,000 crore, the proposal will be sent to the Union Cabinet for approval,” said Kamran Rizvi, Secretary, Ministry of Heavy Industries. He added that rare earth production in India could take up to two years, and in the meantime, imports from alternate sources such as Japan and Vietnam are being explored.
Kumaraswamy also confirmed talks with a Hyderabad-based company that has shown interest in supplying 500 tonnes of rare earth materials by December this year. “We’ve held discussions with the Mines Minister. Our team is working actively, and a decision will be taken within 15 to 20 days,” he said.
Rare earth magnets, especially Neodymium-Iron-Boron (NdFeB), are used in traction motors for electric vehicles, power steering motors, and other critical automotive applications. The proposed incentive plan is expected to boost investments in rare earth processing facilities, enabling India to build a self-reliant ecosystem in high-tech manufacturing.
Currently, Indian Rare Earths Limited (IREL), under the Department of Atomic Energy, holds the country’s only known stockpile of rare earth magnet raw materials, enough to produce 1,500 tonnes of magnets.
As industry stakeholders continue consultations, varying demands have emerged regarding subsidy levels—ranging from 20% to 50%. The final structure of the incentive will likely be determined through a competitive bidding mechanism.
