Overview
- The expanded package, reported at more than ₹70 billion, is awaiting Cabinet approval and the final allocation could still change.
- Officials plan to support roughly five manufacturers through a mix of production-linked incentives and capital subsidies to seed domestic capacity.
- China processes about 90% of global rare-earth output, a dominance that has sharpened policy urgency in sectors such as electric vehicles, renewable energy and defence.
- Analysts warn that funding constraints, limited technical expertise, long build timelines and environmental risks could slow near-term results.
- Alongside the incentives, the government is funding research into rare-earth-free motor technologies, including synchronous reluctance designs, and state-owned firms are pursuing overseas sourcing as India’s estimated 2,000-tonne annual demand can be met by global suppliers.