The government is set to launch a Rs 25 billion incentive programme to ramp up domestic production of rare-earth magnets—key components in electric vehicles (EVs) and wind turbines. This move, aimed at reducing dependence on China, which controls 90 percent of the global rare earths processing, has attracted interest from major players like Vedanta Group, JSW Group, and Sona BLW Precision Forgings.

The proposed scheme, still awaiting Cabinet approval, seeks to support three to four large firms in manufacturing 4,000 tonne of neodymium and praseodymium-based magnets over seven years using locally sourced raw materials. A two-year gestation period will precede a five-year incentive rollout, with an investment of up to Rs six billion per 1,000 tonne of production capacity.

Prime Minister Narendra Modi, at the recent BRICS summit, stressed the need for stable supply chains. Sona BLW CEO Vivek Vikram Singh noted the initiative would enhance supply security for traction motor manufacturers. However, experts caution that India’s modest budget and short timelines pose challenges, given the complex environmental and technical requirements of rare-earth magnet production.