Rare earths set to get up to Rs 5,000 crore incentive scheme

India has firmed up a ₹3,500-5,000 crore scheme to incentivise production of rare earth minerals and derived magnets in the country and could be approved in a fortnight, a top government official said. "The priority is to start domestic-critical mineral production in the shortest time period," the official told ET.The sops under the proposed scheme will be offered through a reverse auction process, the official said. The decision to offer incentives for rare earths comes after an internal ministerial review flagged the need for diversification in the wake of acute dependence on Chinese imports."Fresh steps are being taken to boost domestic availability of critical minerals," he said, adding that at least five large domestic companies had informally expressed keenness to produce these in consultations with the government.China has a near monopoly of the world's supply of rare earth magnets and has curbs on exports. These critical minerals needed in the manufacture of rare earth magnets are crucial for making cars, electric vehicles (EVs) and the renewable energy infrastructure. Industry, particularly the automobile industry, has flagged the detrimental impact of the Chinese curbs and sought government intervention. Beijing in April made a special export licences mandatory for export of seven rare earth elements and related magnets. India's EV and wind turbine makers are the largest demand centres for rare earth elements, cornering over half the entire 4010 metric tonne domestic demand in 2025. Overall demand is expected to more than double to 8220 metric tonnes by 2030. Besides, the government is also planning an amendment to the Mines and Minerals (Development and Regulation) Act to support the critical mineral mission. Besides regulatory tweaks, the Centre is also expecting commercially viable domestic production of rare earth permanent magnets in small quantities later this year.The ministry of science and technology had sanctioned funding for Midwest Advanced Materials Private Ltd, Hyderabad.