Facing an eminent rare earth material supply crisis, the Indian government will soon introduce an incentive scheme to support the domestic production of rare earth magnets, Heavy Industries Minister H D Kumaraswamy announced on 24 June, 2025. The scheme is expected to be rolled out within 15–20 days. “Consultation with stakeholders is underway to decide the amount of the incentive programme,” the Minister said.

If the total incentive exceeds Rs 1,000 crore, it will require Union Cabinet approval, according to ministry officials. The current crisis stems from China’s tighter export regulations on seven rare earth elements and magnets, now requiring extensive end-use disclosures and assurances against defense use or re-export to the US. This has extended the clearance time to over 45 days, creating delays and straining global supply chains.

India is exploring alternative sources such as Japan and Vietnam. A Hyderabad-based firm has committed to deliver 500 tonnes of rare earth minerals by year-end. However, officials estimate that domestic magnet production may begin in about two years. These magnets are critical for electric vehicles, hybrid vehicles, and select internal combustion engine applications.