According to media reports, India is planning a significant increase to its subsidy program for rare-earth magnets, initially announced only in July.
Earlier this year, India unveiled plans to boost the domestic production of rare earth magnets. Now, the subsidies earmarked for the program are reportedly set to rise sharply, from the original $290 million to $788 million, Bloomberg reports, citing sources familiar with the matter.
Several companies are expected to benefit through a combination of production-linked and investment incentives. The proposal still requires cabinet approval, and the final amount could change. Additionally, the Indian government plans to fund research aimed at optimizing electric motors without relying on rare earths, a move that could ultimately reduce raw material demand in the long term.
The subsidy program reflects India’s strategic goal of reducing dependence on rare-earth giant China while simultaneously strengthening its own high-tech sector. In April, China imposed strict export restrictions on several rare-earth elements, which significantly impacted India’s emerging electric vehicle industry. In October, the export regulations were tightened even further. Although implementation has recently been postponed for one year, India and other countries continue to push forward with developing their own supply chains in response to China’s clear demonstration of market dominance.
However, building domestic capacity remains challenging. Technological know-how is concentrated mainly in China, while long lead times and limited investment present additional obstacles, particularly for new mining projects. To improve the economic viability of these initiatives, countries, including India and the United States, are increasingly subsidizing their domestic critical minerals sectors.
Photo: iStock/xiao zhou, Kishan Singh/Vector Townz via Canva, Montage: rawmaterials.net