Published: July 23, 2025 7:53 AM IST 
The demand for rare earth minerals is increasing quickly across the globe. These minerals contribute to several applications, like smartphones, electric vehicles, defense apparatus, and renewable energy technologies. Earlier in July, Union Minister of Heavy Industry and Steel HD Kumaraswamy stated that the Central government has drafted a proposal to offer a total of Rs 1,345 crore in subsidies to improve rare earth magnet manufacturing. This announcement is intended to strengthen critical technology supply chains in the context of restrictions placed on exports, primarily from China.
Kamran Rizvi, the Secretary at the Ministry of Heavy Industries, has said that a draft scheme for rare earth magnet processing has been circulated for inter-ministerial consultation. The scheme is likely to provide incentives for establishing manufacturing infrastructure in the full value chain – mineral extraction and refining to manufacture of finished magnets, reported ET Manufacturing.
Kamran Rizvi, Secretary at the Ministry of Heavy Industries, stated that any manufacturer who does the end-to-end processing of rare earth oxides to finished magnets can receive the subsidy. This scheme will include both private and public sector enterprises, the report stated.
China’s overwhelming control of global rare earth processing, commanding over 90 per cent of the world’s magnet production capacity, has created significant vulnerabilities for industries worldwide. These materials are critical across multiple sectors, including automobiles, home appliances, and clean energy systems.
News agency PTI had reported earlier that the Ministries of Heavy Industries and Mines are currently working on guidelines to support local production of rare earth magnets and minerals used to manufacture rare earth magnets. These magnets have important applications in telecommunication, electric mobility, and in defense. A source close to PTI claimed that a proposal will be sent to the Union Cabinet for final approval once consultations have been completed.
This action comes after China, the world’s largest producer, announced export restrictions on seven rare earth elements and finished magnets back in April. Under the new regulations, Chinese exporters must obtain a license and submit an end-use declaration stating that the materials do not have a defense application and will not be re-exported to the US.
In the previous financial year, India imported more than 80 percent of its 540 tonnes of magnets from China. With China commanding more than 90 percent of the world’s magnet processing capacity, officials also told PTI that the proposed scheme is trying to reduce import dependence and to secure access to a stable supply of key applications, such as electric motors, braking systems, mobile devices, and missile guidance systems.
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