India Plans Rare Earth PLI, to Build Stockpile of Magnets

Building a supply chain can take years, but will reduce dependence on shipments from China

- Reuters

India is holding talks with companies to establish long-term stockpiles of rare earth magnets by offering financial incentives for domestic production, people familiar with the matter said.

Building a supply chain could take years, but would reduce India's dependence on exports from China, which sent shockwaves across global industries, particularly autos, with its April move to curb exports of rare earth materials.

China controls 90% of the processing of such magnets, also used in industries such as clean energy and defense.

Now Prime Minister Narendra Modi's government wants to develop domestic manufacturing capabilities and is considering offering production-based financial incentives to companies, said two people who sought anonymity as the talks are private.

The scheme, being drafted by the ministry of heavy industries, also envisions partly funding the difference between final price of made-in-India magnets and cost of Chinese imports, said the first person.