China's downfall in the rare earths game is certain! Is India becoming the next superpower? Here's the government's plan

The Indian government has made its biggest move to challenge China's global monopoly on rare earth elements. The central government has approved an ambitious ₹7,280 crore scheme to promote the production of rare earth permanent magnets within the country. 

The government has also issued a notification for this scheme. This step is not only a milestone towards our self-reliance but also a roadmap to secure future energy needs.

Dependence on China will end, the government has a big plan

According to a notification issued by the Ministry of Heavy Industries, the primary objective of this scheme is to promote domestic production of sintered neodymium-iron-boron (NdFeB) permanent magnets. 

This is a special type of magnet considered to be the world's most powerful permanent magnet. It is used in electric vehicles (EVs), wind turbines, aerospace, and many electronic devices. 

Until now, India was completely dependent on imports from China or other countries for these critical components, but with this scheme, this supply chain will be established within India. The government aims to establish a production capacity of 6,000 MTPA (million tonnes per annum).

Who will benefit

To ensure complete transparency, the government has decided to invite applications through a Global Tender Inquiry (GTE). Five companies or applicants will be selected. 

According to the plan, a beneficiary will be allocated a minimum capacity of 600 MTPA and a maximum of 1,200 MTPA. The selected companies will receive two types of assistance.

Sales Linked Incentive: Incentive on sale of magnets.

Significantly, the three lowest bidders will also receive an assured supply of raw material, NdPr oxide, from IREL (India) Limited. IREL is the only company under the Department of Atomic Energy that mines and refines rare earths in the country.

India had a treasure, yet why was there compulsion?

It's important to understand that India has the world's fifth-largest reserves of rare earths in its coastal regions . While we have the capacity to mine and convert them into oxides, the real problem was further processing. 

India lacked the midstream capacity to convert oxides into metals, metals into alloys, and finally, alloys into magnets at an industrial scale. 

We relied on China to fill this gap. Now, this government plan will bridge this gap, transforming us from a mere raw material producer to a finished product producer.

India is ready to take flight towards self-reliance

The entire scheme has a seven-year duration. The first two years will be for plant installation (gestation period), and incentives will be provided for production and sales for the next five years. 

The government has also included an interesting provision—if a company begins production and sales of magnets before the two-year deadline, it will receive incentives for that additional period. This provision will encourage companies to work faster.