India Drafts Guidelines To Boost Domestic Rare Earth Production, Reduce China Dependence

Consultations are underway to draft guidelines for incentivising production of rare earth minerals and magnets to help India reduce dependence on China for these critical inputs used is sectors including telecom and EV, according to sources.

Ministries of heavy industries and mines are working on a scheme to boost domestic production of rare earth magnets and minerals, they added.

The scheme will be for both private sector as well as public sector undertakings.

In April this year, China, the world’s dominant exporter of rare earth magnets, imposed restriction on shipments of seven rare earth elements and finished magnets, mandating export licences.

The revised framework demands detailed end-use disclosures and client declarations, including confirmation that the products will not be used in defence or re-exported to the US.

India, which sourced over 80% of its 540 tonne of magnet imports from China last fiscal, has started to feel the impact.

China controls over 90% of the global processing capacity for magnets.

Rare earth minerals include samarium, gadolinium, terbium, dysprosium and lutetium, which are essential in electric motors, braking systems, smartphones and missile technology.