India's Rare Earth Production Plans and Challenges

India is planning to increase its domestic production of rare earth minerals and magnets, crucial for electric vehicles and high-tech industries. However, recent developments in China may pose significant challenges to this initiative.

China's Export Restrictions

• China has tightened export controls on rare earth processing equipment.
• Restrictions now include machinery like centrifugal extraction machines and impurity-removal equipment.
• Exporters must obtain special licenses and declare potential dual civilian and military uses.
• China's move aims to "safeguard national security," affecting India’s plans.

India's Self-Reliance Strategy

• The Indian government has approved a ₹7,300 crore incentive scheme for rare earth magnet production.
• ₹6,500 crore is allocated for capital support, and ₹800 crore for operational costs.
• Industry experts express concerns about increased costs and delays due to reliance on Chinese equipment.
• Alternative sourcing from Germany or Japan is costly, potentially impacting the project's viability.

Proposed Incentive Scheme

• The scheme aims to establish a domestic manufacturing ecosystem for rare earth magnets.
• Expected to produce up to 6,000 tonnes annually over seven years.
• Focuses on converting NdPr (neodymium-praseodymium) oxide into sintered NdFeB (neodymium-iron-boron) magnets.
• These magnets are vital for industries like automobiles, electronics, wind energy, and defence.

China's Dominance in Rare Earths

• China accounts for 61% of global rare earth production and 92% of processing capacity.
• These minerals are essential for electric motors, wind turbines, and electronics.
• Nearly 50 applications under India's scheme are pending, with potential delays due to Chinese restrictions.