New Delhi [India], July 11 (ANI): The central government has earmarked Rs 1,345 crore to incentivise rare earth magnets production in India, aimed at building domestic capacity when there are reports of global short supply.

'Some progress is going on (on the rare earth magnet production front). We have already allocated Rs 1,345 crore (for subsidy). We are on course to select the manufacturers,' Minister for Heavy Industries HD Kumaraswamy told reporters at a press conference Friday.

Heavy Industries Secretary Kamran Rizvi, accompanying the minister, said the scheme has been circulated and it is currently under inter-ministerial consultation.

'We are interested only in magnets. Anybody who gives us magnets will get incentives,' the top official said.

It is expected that there will be at least 2 manufacturers who will participate in this program.

Early this April, China announced a decision to implement export controls on certain rare earth-related items, pushing a supply shortage across the world, including India.

Meanwhile, India is in touch with the Chinese side, seeking predictability in the supply of rare earth metals -- which had been put under the export controls regime by the Xi administration.

China's overwhelming control of global rare earth processing - commanding over 90 per cent of the world's magnet production capacity - has created significant vulnerabilities for industries worldwide. These materials are critical across multiple sectors, including automobiles, home appliances, and clean energy systems.

Beyond China, there are only a few alternative suppliers of critical minerals.

Finance Minister Nirmala Sitharaman announced the setting up of the Critical Mineral Mission in the Union Budget for 2024-25 on July 23, 2024. The Union Cabinet in January 2025 approved the launch of the National Critical Mineral Mission (NCMM) with an expenditure of Rs 16,300 crore and an expected investment of Rs 18,000 crore by Public Sector Undertakings.

Recently, Union Minister for Coal and Mines G Kishan Reddy said the central government is actively encouraging private companies to mine and explore critical minerals overseas and bring them back into the country to serve the needs of the domestic industry. (ANI)