A significant obstacle may stand in the way of India's aim to increase domestic production of rare earth minerals and magnets, which are essential components for high-tech companies and electric vehicles. The Economic Times reports that Indian industry executives and government officials working on the ₹7,300 crore incentive plan are becoming concerned about Beijing's recent decision to tighten limits on the export of rare earth processing equipment.

China's Ministry of Commerce increased export restrictions earlier this month to cover equipment and supplies used in the production and processing of rare earth elements. These controls include devices that are necessary for processing ionic rare earth ores, such as centrifugal extraction machines and intelligent impurity-removal equipment.

Exporters of such goods will now need to get specific licenses and disclose whether the goods have dual military and civilian uses. According to the news article, China stated the action is meant to "protect national security," reflecting similar controls implemented earlier this year on medium and heavy rare earth elements.

India's independence faces financial challenges
In order to promote domestic manufacturing of rare earth magnets, the Indian government has approved an incentive package through the Expenditure Finance Committee. Cabinet clearance is anticipated shortly for the plan, which calls for ₹6,500 crore for capital support and ₹800 crore for operating expenses.
Industry analysts warn that India's objectives may be complicated or delayed by the new Chinese limitations.

According to a source cited by the Economic Times, China supplies the majority of the machinery and technology required to process rare earth minerals. It is feasible to obtain them from other nations, such as Germany or Japan, but doing so will be much more costly and raise project expenses considerably, the source continued.

Although India wants to develop its own processing ecosystem, another executive pointed out that it still depends on foreign equipment to get things going. The incentive program can lose steam if people cannot afford the equipment," he warned.The incentive package of ₹7,300 crore
The program's goal is to establish a fully local manufacturing ecosystem. It is probably going to be called the Scheme to Promote Sintered Rare Earth Permanent Magnet Manufacturing in India. It is scheduled to operate for seven years and expects to produce up to 6,000 tonnes annually.
The primary goal is to create an indigenous value chain capable of producing sintered NdFeB (neodymium-iron-boron) magnets from NdPr (neodymium-praseodymium) oxide. The automotive, electronics, wind energy, and defence industries all depend on these magnets.

The supremacy of China in rare earths
China produces 61% of the world's rare earths and has 92% of the processing capacity, according to the International Energy Agency. These minerals are essential for the production of consumer electronics, industrial machinery, wind turbines, and electric motors.
Nearly 50 applications are still outstanding under the Indian system, according to industry officials, but the news source stated that China's recent action may impede the country's progress towards self-reliance in this crucial area.