Centre Proposes Rs 1,345 Crore Scheme To Incentivise Rare Earth Magnet Production In India

The Central government is planning to launch a Rs 1,345 crore scheme as a subsidy to the Rare Earth manufacturers in the country, Union Minister of Heavy Industry HD Kumaraswamy said on Friday.

“A scheme has been circulated for a Rs 1,345 crore subsidy for manufacturers of rare-earth magnets. It is currently under inter-ministerial consultation. It is proposed that there will be two manufacturers as of now; however, this could change by the time the scheme is ready,” the minister said.

The move comes after China, the world’s biggest Rare Earth Magnet manufacturer, decided to use the commodity as a bargaining chip against US tariff hikes. Which in turn also impacted other nations, including India, that are dependent on Chinese imports.

Kamran Rizvi, Secretary, Ministry of Heavy Industries, said Manufacturers engaged in end-to-end processing from Rare Earth oxides to magnets will be eligible for the subsidy.

The incentives under the scheme are likely to cover both private and public sector entities.

“We are interested in magnets. Anybody who gives us magnets will get an incentive. This (Rs 1,345 crore scheme) is the first outline we have sent for inter-ministerial consultation. It is proposed that there will be two manufacturers,” Rizvi said.

Mahindra and Un Minda express interest

Domestic automaker Mahindra and Mahindra and auto components manufacturer Uno Minda are two firms that have shown intent in setting up units for indigenous magnet production.

In June, Mahindra met with the Ministry of Heavy Industries. The company proposed either partnering with an experienced producer or signing a long-term supply agreement with a local manufacturer.

Mahindra is among the leading electric vehicle manufacturers in the country.

Uno Minda is a long-term supplier of auto components to auto manufacturers such as Maruti Suzuki.

Rare Earth magnets are used in a variety of high-tech applications. These include electronic goods, electric vehicles, and large-scale equipment.

The magnets are crucial in electric motors, especially in electric vehicles and wind turbines. Their ability to generate strong magnetic fields in a compact size makes them highly effective. They also act as a key component in computer hard drives, loudspeakers, headphones and medical devices like MRI scanners.

Also Read: Starlink Gets Space Regulator’s Nod; Set To Launch Satellite Internet In India