India Plans $788M Incentive to Boost Rare Earth Magnet Production

India plans to nearly triple the size of its incentive program for rare earth magnet manufacturing to over $788 million, up from an earlier $290 million allocation, as it aims to build domestic capacity in a sector currently dominated by China, which processes about 90% of global output. This initiative, awaiting cabinet approval, is designed to support around five companies through production-linked and capital subsidies, focusing on critical materials used in electric vehicles, renewable energy, and defense technologies. The move aligns with global efforts to diversify supply chains amid China's recent export controls that have disrupted global supplies. Despite the ambition, India faces challenges including limited funding, lack of technological expertise concentrated in China, and environmental risks associated with mining rare earths. The government is also seeking rare earth magnet import licenses from China, though no Indian-origin firms have yet received such licenses. This expansion reflects India's strategic intent to secure critical materials and reduce dependence on China in this key industrial sector.