This scheme aims to reduce dependence on China for critical materials used in sectors like electric vehicles and wind turbines.
The Indian government is now focusing on strategic sectors that could prove to be the backbone of future technologies. In this context, the central government is preparing a new incentive scheme (PLI scheme) to boost the domestic production of rare-earth magnets. According to information, the plan is to provide budgetary incentives of approximately ₹2500 crore to enable companies in the country to invest in this crucial sector.
Why Rare-Earth Magnets Are Necessary
Rare-earth magnets are used extensively in emerging sectors such as electric vehicles, wind turbines, mobile phones, defense equipment, and medical technology. The quality and strength of these magnets make them significantly better than conventional magnets. However, India currently imports a large portion of them from China.
China has a unilateral dominance over these products and controls 90 percent of the world's rare-earth processing activities. This is why any change in China's policies can directly affect Indian industries.
What is the Government's Plan?
According to sources, the central government's proposed scheme will be based on the Production Linked Incentive (PLI) model. Under this, financial assistance will be provided to private companies for the production of rare-earth magnets in India. Its objective is to produce these materials within the country and reduce dependence on foreign imports.
The government may soon prepare a draft of this policy and send it to the cabinet. The details of the scheme are currently under internal discussion, and some changes are possible.
Which Companies Are Showing Interest?
According to government documents and media reports, several major companies in the country have shown initial interest in this scheme. Key names include:
- Vedanta Group: This mining company, led by Anil Agarwal, has expressed interest in rare-earth mining and processing.
- JSW Group: The JSW Group, led by Sajjan Jindal, wants to expand in this sector due to its b hold in the metal and energy sectors.
- Sona BLW Precision Forgings Limited: This company, which manufactures parts for electric vehicles, is considered serious about producing magnets.
The participation of these companies can help strengthen the technological base and supply chain in India.
Efforts to Get Out of Dependence on China
The Covid pandemic and the subsequent global situation have shown how much of a risk excessive reliance on a single country can be. Especially when it comes to critical materials. In recent months, China has imposed restrictions like export bans on rare-earth elements due to trade tensions with the United States and its allies.
This has affected supply chains around the world and caused difficulties for companies making everything from electric vehicles to defense products. In such a situation, this step by the Indian government is seen as a move towards protecting domestic industries and increasing self-reliance.
'Make in India' Will Get a New Dimension
Domestic manufacturing of rare-earth magnets can prove to be a boost to India's Make in India and Atmanirbhar Bharat missions. Until now, this sector has been entirely import-dependent. But if the incentive schemes are realized, India can develop its own production capabilities in this sector in the coming years.
EV and Green Energy Sector Will Also Benefit
India has made big plans for its green energy goals by 2030. Whether it is electric vehicles or renewable energy sources like wind turbines, rare-earth magnets are used everywhere. If these materials are produced in the country, there will be a reduction in costs as well as stability in production.
New Opportunities for Jobs and Investment
This step towards domestic manufacturing of rare-earth magnets will not only bring technological self-reliance, but it will also create new jobs and investment opportunities. Many multinational companies may also explore the option of establishing their manufacturing centers in India.
Sector Will Advance with Policy Support
Until now, there was no clear policy regarding the extraction and processing of rare earths in India. But with this initiative of the government, private companies can get a clear direction and support. Also, in the coming time, states will also get a chance to work on the possibilities of mining and production in this sector.
Quality Control and Research Will Also Be Promoted
Under this scheme, the government may focus not only on production but also on quality control, scientific research, and technology development. By promoting cooperation between Indian institutions and the private sector, it can be ensured that the rare-earth magnets made in the country meet international standards.
