India has rolled out a Rs 7,280 crore scheme to boost domestic production of rare earth permanent magnets, a key input for electric vehicles and advanced technologies. While the move aims to cut import dependence, industry experts are divided on how quickly India can scale up. They are also divided on whether India can become cost-competitive.

Sarada Bhushan Mohanty of Indian Rare Earths Limited said supply constraints have eased slightly after China allowed limited exports. This has helped some EV-focused companies access materials, though the process remains slow. He also flagged cost challenges. Notably, domestic magnet production could be significantly more expensive than in China due to higher capital and financing costs. There is also dependence on imported heavy rare-earth elements.

Nagarajan Mahadeven of Entellus Industries said India has strength in upstream rare earth oxide production. Commercial-scale metal and alloy conversion has already been achieved. Large-scale production could begin next year, though component manufacturing still relies on imports.

The scheme offers a Rs 6,450 crore sales-linked incentive over five years and a Rs 750 crore capital subsidy. It targets an annual capacity of 6,000 tonnes by 2030. Mahadeven expressed confidence that the programme’s structure and incentives will help companies scale up within the next two years. Moreover, it aims to attract global partners.

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