PTI New Delhi

The government will take a decision on rolling out a scheme to subsidise domestic production of rare earth magnets in 15-20 days, Union Minister H D Kumaraswamy said on Tuesday. Stakeholder consultations are underway to determine the quantum of subsidy to be offered under the scheme. If the total incentives involved cross Rs 1,000 crore, the scheme will be sent to the Union Cabinet for approval, Secretary in the Heavy Industries Ministry Kamran Rizvi said.

"One Hyderabad-based company... they are showing interest. They have promised that they will deliver 500 tonnes by this year-end, December. We have (had) discussions with the Mines Minister. Our Secretary and our ministry are working on, ultimately, a decision (will be taken) I think within 15-20 days," said Kumaraswamy, the Minister for Heavy Industries and Steel.

China's recent restrictions on exports of key metals caused widespread disruption in the manufacturing of automobiles and semiconductor chips in a host of countries, including India.

The secretary said the actual production of rare earth magnets will take about two years, and the government, along with the industry, is looking at alternative sources of procurement in the interim period, including Japan and Vietnam. "So you are aware that rare earth is available in Japan, in Vietnam, and efforts are going on to take from there," Rizvi said.

Rare earth magnets include neodymium-iron-boron (NdFeB). It is used for high-performance automotive applications such as traction motors in electric vehicles (two-wheelers and passenger vehicles) and power steering motors (in passenger vehicles) in both electric vehicles and internal combustion engine vehicles.