In a strategic move to secure rare earth magnets, a critical component for the electric vehicle and electronics industries, the government is exploring ways to boost domestic manufacturing of these vital raw materials, amid China’s export restrictions, a CNBC-TV18 report stated citing sources.
Amidst rising global tensions and supply chain uncertainties, the government is exploring multiple avenues to reduce dependence on foreign sources, especially China, which currently dominates the global market.
According to the report, officials are evaluating how India Rare Earths Ltd, a Government of India PSU, can be leveraged for rare earth magnet production. The government is also considering private sector collaborations with India Rare Earths Ltd to build domestic capacity, the sources confirmed.
Earlier, Commerce and Industry Minister Piyush Goyal had said that China’s restrictions on the export of rare earth elements and related magnets will have short-term impacts on the domestic automotive and white goods sectors. He had further added that the government is working on finding alternatives, to resolve the matter.
On June 10, the Directorate General of Foreign Trade (DGFT) also conducted a meeting with automobile manufacturers to understand the challenges faced by Indian companies in securing export licenses from the Chinese government.
The matter, per the report, has also been escalated diplomatically, with the Indian Embassy in China taking up the issue with the Chinese Commerce Ministry. India is seeking greater transparency in the application process and faster disposal of export license requests.
Meanwhile, sources told CNBC-TV18 that the Indian government is exploring several mid to long term strategies to support the sector. These include the Production-Linked Incentive (PLI) scheme, subsidies and incentives for manufacturing of rare-earth magnets.