Amid the ongoing shortage of rare earth minerals necessary for EV manufacturing and a slew of other large scale production operations. India is planning to establish a stockpile of rare earth minerals by incentivizing domestic production. sources familiar with the matter reported to Reuters. The Report further shared inputs from people familiar with the matter established that building such a supply chain could take years, but in the long-term it would reduce India’s dependence on shipments from China. The restrictions that the china has laid out has affected global industries in the Auto sector, the restrictions were laid out on April 4.
Since China holds and controls the ability to control 90% of the processing of such magnets there have been reports that suggested that it has been using this prowess as a leverage to wage a war against US Tariff implications. The Reuters report further elucidated that Prime Minister Narendra Modi’s government now seeks to develop domestic manufacturing capabilities and is considering offering production- based fiscal incentives to companies.
Ministry Of Heavy Industries to Fund The Difference
Reuters has further reported that since the scheme is being drafted by the ministry of heavy industries, it also envisions partly funding the difference between the final price of the made in India magnet and imports. Such incentives would help achieve cost parity and boost local demand. The Government would likely meet industry officials next week to finalize the details. India already has its sources of rare earth minerals as they have been excavated for years by state run IREL, yet these are mainly used by the atomic energy and defense units, with supplies for other uses being imported from China.
India’s Action Plan
India could harness the situation and further enhance its capability to provide the world rare earth minerals as its the third largest reserves of rare earth minerals of around 6.9 million tons, Beyond that US geological survey points out that India has only been able to harness a fraction of its total reserves due to the limited investments by private companies.
To combat the situation India has launched an all new National Critical Mineral Mission , which would help the nation attain self reliance in the sector. In recent years , it has begun exploration for neodymium , a rare earth metal widely used in magnets for the auto industry. New projects have been further spearheading exploration for neodymium, a rare earth metal widely used in magnets for the auto industry. As reported by Reuters based on their sources, the government is undertaking profound efforts to ensure that the nation gains an advantage and harnesses its rare metals reserves more effectively.
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