With China tightening supply of rare earth magnets — critical components used in electric vehicles and other high-tech products — the Ministry of Heavy Industries is stepping in to reduce India’s dependence on Chinese imports.
According to Business Standard, the ministry has called a high-level meeting of industry stakeholders on June 3 to finalise a concept note for a new scheme aimed at promoting the domestic manufacture of rare earth magnets.
Concerns rise over looming inventory shortages
Reuters reported, citing company executives and industry documents, that inventories held by auto part makers are expected to run out by the end of May.
According to The Economic Times, China controls more than 90 per cent of the global processing capacity for these magnets, which are essential not only for electric vehicle motors but also for traditional car components like power windows and audio speakers.
Beijing introduced export restrictions in April in response to US President Donald Trump’s tariffs, requiring companies to obtain import permits from Chinese authorities. While the curbs primarily target high-performance magnets, shipments of low-end magnets have also been held up amid confusion over how the new rules should be implemented.
Government aiming to develop domestic rare earth industry
The proposed note includes a multi-pronged approach: offering targeted financial incentives to companies entering the sector, establishing public-private partnerships to set up rare earth processing and magnet production facilities, and identifying alternative international sources for raw materials to diversify supply chains, Business Standard reports.
This move comes shortly after a preliminary discussion held earlier this week, where concerns over India’s vulnerability to supply disruptions were raised.
The government is now looking to act swiftly to build a robust domestic ecosystem for rare earth magnet production, seen as vital for India’s growing electric mobility and electronics sectors.