India Plans Incentives for Rare Earth Magnet Production

India is preparing to launch a ₹3,500-5,000 crore production-linked incentive scheme to boost domestic manufacturing of rare earth minerals and magnets, with approval anticipated within weeks. The reverse auction-based scheme aims to reduce India's reliance on Chinese imports, which became critical after recent Chinese export curbs disrupted supply chains. Acute shortages have already affected the country's automotive and technology sectors, spurring urgent calls for government action. Despite holding substantial rare earth reserves, India currently imports over 53,000 metric tonnes of magnets from China annually. Companies including Midwest Advanced Materials and at least four others have expressed interest, and initial domestic magnet production is expected to begin later this year. The initiative forms a key part of India's strategy to diversify critical mineral sourcing, strengthen renewable energy and electric vehicle sectors, and address vulnerabilities tied to China's dominance in this market.