India plans to nearly triple its incentive program for rare earth magnet manufacturing, boosting the scheme to more than 7,000 crore rupees, or $788 million. This significant increase from an earlier $290 million plan aims to build robust domestic capacity in a critical sector. The move seeks to reduce India's heavy reliance on China for these essential materials, which are vital for electric vehicles, renewable energy systems, and defense technologies. The proposal is currently awaiting cabinet approval.^{[1][2][3][4][5][6]} Boosting Domestic Production The expanded incentive program represents a substantial 172% increase in financial support. It will primarily support about five companies through a combination of production-linked incentives and capital subsidies. The government's goal is to establish a fully indigenous manufacturing ecosystem capable of producing up to 6,000 tonnes of sintered rare earth permanent magnets annually within seven years. This target capacity is expected to meet India's domestic demand for these specialized magnets by 2030. These crucial magnets include neodymium-iron-boron (NdFeB) and samarium-cobalt (SmCo) types.^[7][6][8][9] The initiative, likely to be called the "Scheme to Promote Sintered Rare Earth Permanent Magnet Manufacturing in India," aims to create a homegrown value chain. This chain will span from converting neodymium-praseodymium (NdPr) oxide into sintered NdFeB magnets. This comprehensive approach addresses historical supply chain vulnerabilities and aligns with India's broader critical minerals energy transition objectives.^[7][8] Reducing Reliance on China This strategic push comes as many nations, including India, accelerate efforts to diversify their rare earth supply chains. China currently dominates the global market, processing about 90% of the world's rare earth output. Tighter export controls imposed by China in April, amid its trade dispute with the United States, have disrupted supplies for global industries, including automakers.^{[1][2][3][4][5][10][6]} Earlier this year, Prime Minister Narendra Modi emphasized that critical minerals should not be "weaponized." He called for stable and diversified global supply chains for these essential resources. India's expansion plan directly addresses this concern, aiming to lessen dependence on a single source.^{[1][2][4][5][10]} India holds the world's fifth-largest reserves of rare earth oxides (REO), estimated at approximately 6.9 million tonnes. Despite this significant resource potential, the country's current production accounts for less than 3% of the global rare earth oxide output. This gap highlights a major opportunity for India to develop its rare earth manufacturing capabilities.^[7][11] Challenges and Strategic Vision Developing a robust domestic rare earth magnet industry in India faces several challenges. These include limited funding, a scarcity of specialized expertise, and the long timelines typically associated with such complex projects. Currently, domestic production of rare earth magnets is not economically viable without government subsidies. The technological know-how for processing and manufacturing these advanced magnets remains heavily concentrated in China.^{[1][2][3][4][5][10]} To overcome these hurdles, state-owned firms are taking the lead in securing overseas mining partnerships to ensure access to raw materials. The government is also exploring alternative technologies, such as funding studies on "synchronous reluctance motors." This magnet-free technology could eventually reduce the overall dependence on rare earth materials. India hopes the expanded program will attract global magnet makers to establish local subsidiaries or joint ventures, further reducing reliance on Chinese imports.^{[1][2][4][5][10][12]} India's strategy involves a comprehensive "mine-to-magnet" approach, covering every stage from raw material extraction to final magnet production. This includes expanding domestic mining capabilities, enhancing separation and refining processes, and building magnet manufacturing facilities. The National Critical Mineral Mission 2025 also underscores India's commitment to developing an effective framework for self-reliance in this critical sector. The overall private investment across the rare earth value chain is expected to exceed 15,000 crore rupees.^[7][13] The Gujarat Mineral Development Corporation (GMDC), for instance, aims to produce 12,000 tonnes of rare earth oxides annually by fiscal year 2028. This initiative is part of a broader effort to establish a complete supply chain within India. Such efforts are crucial for India's long-term plans for electric mobility, renewable energy, and defense manufacturing, integrating the nation into global value chains for these vital materials.^[9][11]