Govt clears ₹7,280 cr rare earth magnets scheme

The Union cabinet on Wednesday approved a ₹7,280 crore-incentive scheme for creating five manufacturing facilities for rare earth permanent magnets in the country, with a combined annual capacity of 6,000 metric tonnes to meet the entire annual requirement of the automobile, electronics, aerospace, renewables and defence sectors in three to four years.

- Rajeev Jayaswal

China currently has a stranglehold over global rare earth supplies, and has leveraged this to good effect.

Explaining the rationale of investing in domestic manufacturing capabilities for rare earth permanent magnets (REPM), Union information and broadcasting minister Ashwini Vaishnaw said: “This sector is of strategic importance. We have to be present in this. Without this sector several types of manufacturing will come to a standstill.”

Referring to the recent news on the US-China dialogue over rare earth supplies, he said: “Rare earth is becoming such an important negotiating factor... it’s very important to have a resilient supply chain.” Responding to the US tariffs, China introduced export controls for rare earth elements in April this year, disrupting the global supply chain of these because it enjoys near monopoly in rare earth exports.