How Modi government plans to boost rare earth magnet production
What's the story
The Indian government is working on fiscal incentives to boost the local production of rare earth magnets, Union Minister H D Kumaraswamy said. The move comes in response to supply disruptions from China, which currently dominates this market. Kumaraswamy, who is the Minister for Heavy Industries and Steel, emphasized that rare earth magnets are vital for electric vehicle (EV) motors.
Strategic plan
Targeted support for capital, operational expenditure
The government is planning a scheme to provide "targeted support" for capital and operational expenditure in the rare earth magnet industry. This program would help bridge cost gaps, offer relief from high tariffs on key equipment, and ensure continuity of supply amid increasing global restrictions.
Subsidy details
Earlier announcement on ₹1,345cr scheme
In July, Kumaraswamy had announced that inter-ministerial consultations were underway for a ₹1,345 crore scheme to subsidize the production of rare earth magnets in India. The plan proposes incentives for two select manufacturers. The subsidy would facilitate investment in setting up processing facilities where companies could convert rare earth oxides into magnets.
Industry leader
IREL's role crucial in domestic production push
Indian Rare Earths Limited (IREL), a public sector unit under the Department of Atomic Energy, is the only source of rare earths in India. The company's role is critical to the government's plans for boosting domestic production. This comes after China's recent export restrictions on key metals disrupted automobile and semiconductor chip manufacturing in several countries including India.