Sarada Bhushan Mohanty of Indian Rare Earths Limited and Nagarajan Mahadeven from Entellus Industries offered contrasting assessments of the plan, highlighting both the progress made and the challenges that still lie ahead.
Supply chain easing, but challenges remainMohanty said supply constraints eased slightly after China allowed limited exports under end-user restrictions. He noted that some imports have resumed and select companies, especially in the EV space, are receiving materials, though the process remains slow.
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Mahadeven said India has strong upstream capability in producing rare earth oxides, but gaps persist in the midstream and downstream segments. “Conversion of this oxide into metal and alloy on a commercial scale, we have achieved,” he said, adding that large-scale production could begin sometime next calendar year. However, he acknowledged that component manufacturing remains fully import-dependent.
Details of the government scheme
The new policy includes a ₹6,450 crore sales-linked incentive for five years of production and a ₹750 crore capital subsidy to support manufacturing facilities. The government plans to build a domestic capacity of 6,000 metric tonne per annum, spread across up to five beneficiaries selected through a global competitive bidding process. The capacity target is aligned with projected domestic demand by 2030.Cost, raw material, and technology hurdles
Mohanty flagged cost competitiveness as a major concern. He estimated domestic magnet production costs at around $102 per kg, compared with China’s $78 per kg. “There is a clear disability available in this, around $24,” he said, citing higher capital, finance, and depreciation costs.
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He also pointed out that heavy rare earth elements such as Dysprosium and Terbium are not available domestically and will need to be imported during the initial phase. Technology access is another constraint, with critical know-how remaining “heavily guarded” by countries including Japan, South Korea, and the US, making partnerships essential.
Confidence on execution timeline
Mahadeven, however, expressed confidence in the programme’s structure and timeline. He said the scheme effectively runs for seven years, including two years of gestation and five years of production. “In the two years’ time, I’m very confident that the gestation would be over,” he said, pointing to support from institutions such as the Technology Development Board.
He added that the incentive announcement has made global players more willing to partner with Indian firms and said Entellus Industries expects to be ready to leverage the policy within the next two years.
For the full interview, watch the accompanying video
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