New Delhi, July 11: The Indian government has drawn up a scheme to offer subsidies to the tune of Rs 1,345 crore for manufacturers of Rare Earth magnets in the country, Union Minister of Heavy Industry, H.D. Kumaraswamy said on Friday.
“A scheme has been circulated for Rs 1,345 crore subsidy for manufacturers of Rare Earth magnets. It is currently under inter-ministerial consultation. It is proposed that there will be two manufacturers as of now, however, this could change by the time the scheme is ready,” the minister said.
Secretary, Ministry of Heavy Industry, Kamran Rizvi said manufacturers engaged in end-to-end processing from Rare Earth oxides to magnets will be eligible for the subsidy. The incentives proposed in the scheme are expected to cover both private and public sector companies.
“We are interested in magnets. Anybody who gives us magnets will get incentive. This (Rs 1,345 crore scheme) is the first outline we have sent for inter-ministerial consultation. It is proposed that there will be two manufacturers,” Rizvi said.
Homegrown automaker Mahindra & Mahindra and auto components manufacturer Uno Minda are two companies that have expressed an interest in setting up facilities for domestic magnet production.
During a meeting with the Ministry of Heavy Industries in June, Mahindra proposed that the company could either partner with an established producer or enter a long-term supply agreement with a local manufacturer.
The company is among the leading electric vehicle manufacturers in the country. Uno Minda supplies auto components to auto manufacturers such as Maruti Suzuki. China has imposed restrictions on the exports of Rare Earth magnets in retaliation against the US tariff hikes and is using the commodity as a bargaining chip in the trade war.
This has also had an impact on other countries that are dependent on Chinese imports. Rare Earth magnets are used in a variety of high-tech applications, ranging from electronic goods and electric vehicles to large-scale industrial equipment.
These magnets are crucial in electric motors, particularly in electric vehicles and wind turbines, due to their ability to generate strong magnetic fields with a small size. They also find widespread use in computer hard drives, loudspeakers, headphones, and medical devices like MRI scanners.
IANS