Govt mulls PLI-like scheme for local manufacturing of rare earth magnets, say sources

The Indian government is considering a production-linked incentive (PLI)-like scheme to boost local manufacturing of rare earth magnets, according to sources. The move is part of broader efforts to reduce dependence on imports and enhance self-reliance in critical materials.Discussions between industry stakeholders and government officials are underway to devise an incentive-based mechanism aimed at promoting the manufacturing of high-performance rare earth (HRE) magnets. These magnets are essential components in sectors like electric vehicles, renewable energy, and defense.
The government is examining various proposals for financial support targeted at both small and large enterprises. The support measures are expected to cover short and medium-term horizons, facilitating the establishment of domestic manufacturing and assembly capacities.
Industry representatives have proposed setting up magnet assembly and processing facilities in the near term, seeking government financial backing to make this viable.For long-term self-reliance, stakeholders emphasise the need for sustained incentives that encourage companies to develop full-scale manufacturing capabilities.

Officials indicate that financial and policy support may also be critical to fostering public-private partnerships in this strategic sector. However, sources said that no formal policy draft has been finalised or put on the table yet.

Beijing restricted exports of rare earth materials on April 4. These magnets are vital components in electric vehicles, renewable energy systems, and defence technologies.

China currently processes around 90% of the global rare earth magnet supply.