India Plans $290M Incentive to Boost Rare Earth Production, Reduce China Reliance

India is advancing plans to reduce its heavy dependence on China for rare-earth magnets critical to electric vehicles, wind turbines, and other technologies by proposing a government incentive program potentially worth up to $290 million. This initiative has garnered interest from major Indian conglomerates including Vedanta Group, JSW Group, and Sona BLW Precision Forgings. Currently, India imports over 80% of its rare-earth magnets from China, which controls approximately 90% of the global processing capacity and recently tightened export controls affecting global supply chains. The proposed scheme, involving both private firms and public sector undertakings, aims to promote domestic production of magnets and rare-earth minerals such as neodymium, praseodymium, samarium, and dysprosium through a multi-year plan with initial gestation and subsequent incentives. The Indian government, including ministries of heavy industries and mines, is drafting guidelines to ensure these resources are produced locally with transparency around end-use, reflecting concerns about China’s export restrictions and geopolitical considerations. Prime Minister Narendra Modi emphasized the importance of securing critical minerals to prevent their use as geopolitical leverage, highlighting India's strategic push for supply chain resilience.