Powering Up India: A ₹2,500 Crore Push for Rare-Earth Magnets

In a strategic push to reduce reliance on Chinese imports and strengthen domestic supply chains, the Indian government is preparing to launch a ₹2,500 crore incentive scheme to promote the local production of rare-earth magnets—critical components used in electric vehicles (EVs), wind turbines, and other clean energy technologies.

The proposed scheme, currently pending Cabinet approval, aims to support 3–4 large manufacturers in producing up to 4,000 tonnes of neodymium and praseodymium-based magnets over a seven-year period. The plan includes a two-year gestation phase, followed by five years of performance-linked incentives, with capital investments estimated at up to ₹600 crore per 1,000-tonne capacity.

Major industrial groups such as Vedanta Group, JSW Group, and Sona BLW Precision Forgings have already expressed interest in participating. Speaking at the recent BRICS summit, Prime Minister Narendra Modi emphasized the importance of stable and resilient supply chains, particularly for strategic materials.

Sona BLW CEO Vivek Vikram Singh highlighted the scheme’s potential to bolster supply security for Indian traction motor manufacturers. However, industry analysts caution that the limited budget and aggressive timelines may present hurdles, given the environmental sensitivities and technological complexities associated with rare-earth magnet production.

News by Rahul Yelligetti.