₹7,000 crore! Centre plans to boost its made-in-India rare earth plan amid growing pressure from China

Amid ongoing restrictions from China, India plans to nearly triple its incentive programme for domestic rare earth production, Bloomberg reported on Saturday. Sources said the government is considering raising funding for the scheme to about ₹7,000 crore ($788 million), up from the previously proposed $290 million. The move aims to strengthen India’s supply of critical materials for electric vehicles, renewable energy, and defense, and is awaiting cabinet approval.

Prime Minister Narendra Modi earlier stressed the need for a stable, diversified global supply chain and cautioned against the weaponization of critical minerals. India, however, faces challenges including limited technical expertise, long project timelines, and funding shortages, which have slowed domestic rare earth production. State-owned firms are leading efforts to secure overseas mining partnerships, while domestic manufacturing remains in early stages, with China still dominating extraction technology.

The government initiative will support around five companies through a combination of production-linked incentives and capital subsidies. India’s push aligns with global strategies to reduce reliance on China, similar to efforts by the European Union, Japan, and the US, as nations seek alternative sources of critical raw materials and rare earth minerals for strategic industries.