India rare earth magnet incentive programme set to triple to $788m

Core Insights - India is set to expand its rare earth magnet incentive programme to over Rs70bn ($786m), nearly tripling its size to enhance domestic capacity in a sector currently dominated by China [1] - The previous plan was $290m, focusing on critical materials for electric vehicles, renewable energy, and defence, with potential revisions to the final allocation still pending [2] - The initiative aligns with global efforts to establish resilient supply chains for rare earth magnets, especially after China tightened export controls, which disrupted global supplies [3] Industry Context - India aims to reduce dependency on China, which processes around 90% of the world's rare earth output, amid ongoing trade tensions with the US [3][4] - The Indian government’s expanded initiative will support around five companies through production-linked incentives and capital subsidies [6] - Domestic production of rare earths in India is currently non-viable without government subsidies, leading state-owned enterprises to seek overseas mining partnerships [5] Technological and Market Developments - The government is also funding studies on synchronous reluctance motors to reduce reliance on rare earth materials [7] - India is expected to require around 2,000 tonnes of rare earth oxides annually, a demand that can be met by global producers [7] - Despite China's recent moves to issue import licenses for rare earth magnets intended for use in India, no licenses have been granted to Indian-origin companies [6]