New Delhi: The Ministry of Heavy Industries (MHI) and the Department of Atomic Energy (DAE) are set to roll out a Rs 1,000 crore scheme to boost rare earth magnet manufacturing in India, aiming to reduce import reliance in strategic sectors like electric mobility, electronics and defence.
Officials said the proposal is likely to be finalised within the next two weeks. The scheme will focus on building domestic capacity to produce up to 1,500 tonnes of rare earth magnets annually.
India Rare Earths Limited (IREL), a public sector undertaking, will provide approximately 500 tonnes of rare earth raw materials to original equipment manufacturers (OEMs) involved in magnet production, according to sources familiar with the plan.
At present, five to six companies have shown interest in entering the domestic magnet manufacturing space. However, there is concern within the government that some manufacturers may still prefer importing fully assembled components instead of sourcing magnets locally, citing ease of procurement and cost factors.
To address these challenges, officials are evaluating the possibility of tweaking the Domestic Value Addition (DVA) norms under the Production Linked Incentive (PLI) scheme. The move is aimed at encouraging deeper localisation of component manufacturing and discouraging the use of imported magnets in downstream products.
The current stability in rare earth magnet supply is not seen as a long-term guarantee, especially given increasing global demand and geopolitical supply chain risks. The government’s approach, therefore, includes a strategic emphasis on securing raw material access and building processing capacity domestically.
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