India Plans Rs 1,345 Crore Subsidy to Boost Rare Earth Magnet Production

The Indian government plans to give ₹1,345 crore in subsidies to companies making Rare Earth magnets in India, Union Minister H.D. Kumaraswamy said on Friday.

The subsidy scheme is currently under inter-ministerial discussion. It aims to support at least two manufacturers, but this number may change later.

Kamran Rizvi, Secretary of the Ministry of Heavy Industry, said that companies processing Rare Earth oxides into magnets will qualify for the incentives. Both private and public sector companies can benefit.

“We are interested in magnets. Whoever makes magnets will get incentives,” Rizvi said.

Automaker Mahindra & Mahindra and auto parts maker Uno Minda have shown interest in manufacturing these magnets in India. Mahindra may partner with an existing producer or sign a long-term supply deal. Uno Minda supplies parts to companies like Maruti Suzuki.

The move comes as China has restricted exports of Rare Earth magnets, affecting global supply. These magnets are crucial for making electric motors in EVs and wind turbines because they create strong magnetic fields even in small sizes. They are also used in computers, headphones, loudspeakers, and medical devices like MRI scanners.

The subsidy aims to reduce India’s dependence on imports and strengthen its electric vehicle and electronics industries.