The Indian government is planning to roll out a Rs 1,345 crore subsidy scheme aimed at promoting the production of Rare Earth magnets, Union Minister of Heavy Industry H.D. Kumaraswamy announced on Friday.
The proposed scheme is currently under inter-ministerial consultation and is expected to support two manufacturers initially, though this number could change once the policy is finalised.
“An incentive scheme worth Rs 1,345 crore has been circulated to support manufacturers of Rare Earth magnets in India,” said Kumaraswamy. “We are targeting those engaged in complete end-to-end processing — from Rare Earth oxides to finished magnets.”
Secretary of the Ministry of Heavy Industry, Kamran Rizvi, said both private and public sector players would be eligible for the scheme. “Anybody who gives us magnets will get incentives. This is the first outline that has gone for consultation. As of now, two manufacturers are proposed under the scheme,” he said.
Two key players — Mahindra & Mahindra and Uno Minda — have shown interest in establishing Rare Earth magnet production facilities. Mahindra, one of India’s leading EV makers, recently held discussions with the ministry, expressing willingness to either partner with existing producers or enter into long-term supply agreements with domestic manufacturers.
Auto component giant Uno Minda, which supplies parts to companies like Maruti Suzuki, is also evaluating participation in the initiative.
The move comes against the backdrop of China imposing export restrictions on Rare Earth magnets amid rising global trade tensions. These magnets are critical in several high-tech sectors, including electric vehicles, wind turbines, medical devices (like MRI scanners), consumer electronics, and industrial machinery.
By promoting local production, the government aims to mitigate supply chain risks, reduce dependence on Chinese imports, and bolster India’s EV and renewable energy manufacturing ecosystem.