Global rare earth suppliers step in as India eyes self-reliance amid China curbs

New Delhi: A host of global rare earth oxide suppliers based across South America, Africa, United Kingdom, and Australia have offered supplying to India as the country gears up to roll out incentives for permanent magnet manufacturing, a government official said.

"Preliminary discussions have been held with some rare earth suppliers....They are keen to supply," a senior official told ET.

India needs a steady supply of rare earth oxides to kick start local manufacturing. The official said India requires roughly 2000 tonnes of neodymium (rare earth) oxides annually but IREL ( India) can supply just 400-500 tonnes per year.

A tonne of rare earth oxide can produce roughly three tonnes of permanent magnets which are essential for EV motors and find application across new age electronics.

India faced an acute shortage after China, which is the largest supplier of rare earth magnets, clamped down exports.

China has allowed conditional exports but the government is keen to ensure India gains self reliance and is not completely dependent on overseas supplies from one source.

The proposed ₹7,300 crore scheme that offers incentives for local production is expected to be rolled out soon. It has already been approved by the cabinet.

"The sops, which are likely to shortly be announced, will support sale of domestically manufactured rare earth magnets, making them competitive against imports," the senior official said, adding that companies availing incentives under the proposed scheme will be allowed to import equipment used in producing magnets.

Incentives under the scheme will be capped for up to 1200 tonnes of magnets per year per company.

Besides weaning import dependence, the centre is also testing the waters for supporting research on magnet-less motors.

A High-level Viksit Bharat 2047 committee has suggested exploring utility of reluctance motors for electric cars, buses, and trucks.