Government considers similar PLI initiative for domestic production of rare earth magnets, according to sources.

The Indian government is exploring a scheme similar to production-linked incentives (PLI) to enhance domestic manufacturing of rare earth magnets, as reported by sources. This initiative is part of broader efforts to diminish reliance on imports and boost self-sufficiency in essential materials.

Ongoing discussions between industry stakeholders and government officials aim to develop an incentive-based approach to foster the manufacture of high-performance rare earth (HRE) magnets. These magnets play a crucial role in various sectors including electric vehicles, renewable energy, and defense.

The government is evaluating a range of proposals for financial aid focused on both small and large businesses. The support is anticipated to address short- and medium-term needs, helping to establish local manufacturing and assembly capabilities.
Industry leaders have suggested the immediate creation of magnet assembly and processing plants, seeking governmental financial assistance to ensure their feasibility.

For long-term independence, stakeholders highlight the necessity of ongoing incentives that motivate firms to build comprehensive manufacturing capabilities.

Officials have indicated that financial and policy backing may also be vital for nurturing public-private collaborations in this key sector. However, sources have stated that a formal policy draft has yet to be completed or introduced.

China imposed restrictions on the export of rare earth materials on April 4. These magnets are crucial in the production of electric vehicles, renewable energy systems, and defense technologies.

Currently, China processes about 90% of the global supply of rare earth magnets.