Latest news with #heavyindustries
Yahoo
2 days ago
- Automotive
- Yahoo
India plans rare earth magnet incentives as supply threat mounts, sources say
By Aditi Shah, Neha Arora and Aditya Kalra NEW DELHI (Reuters) -India is holding talks with companies to establish long-term stockpiles of rare earth magnets by offering fiscal incentives for domestic production, people familiar with the matter said. Building such a supply chain could take years, but would reduce India's dependence on shipments from China, which sent shockwaves across global industries, particularly autos, with its April 4 move to curb exports of rare earth materials. China controls 90% of the processing of such magnets, also used in industries such as clean energy and defence. Now Prime Minister Narendra Modi's government wants to develop domestic manufacturing capabilities and is considering offering production-based fiscal incentives to companies, said two sources who sought anonymity as the talks are private. The scheme, being drafted by the ministry of heavy industries, also envisions partly funding the difference between the final price of the made-in-India magnet and the cost of the Chinese imports, the first source said. This would help achieve cost parity and boost local demand, the source said, adding that funding for the scheme has yet to be decided, with the government likely to meet industry officials next week to finalise the details. The heavy industries ministry did not respond to Reuters' queries. Although a state-run firm, IREL, has been mining rare earth materials for years, these are mainly used by the atomic energy and defence units, with most supplies for other uses still imported from China. India's move comes as auto companies the world over flag risks that they could face supply disruptions within days. In Japan, Suzuki Motor, has suspended production of its Swift car because of China's curbs. In India, auto industry body SIAM has privately told the government it expects production "to come to a grinding halt" within a timeframe starting from the end of May or early June. The heavy industries ministry also plans to send a delegation of auto industry executives to meet officials in Beijing to push for faster approvals, with two industry officials warning that was the only near-term solution. "The short-term solution has to be to get Chinese authorities to clear things," said one of the executives, who fears shortages at his company. "A radical shift in supply chain is not possible in the short term." Some auto companies and their suppliers will be able to stretch operations until the end of June, after which the situation will turn "really scary", said the second executive, adding it would affect not just electric cars but all vehicles. India has the world's third-largest reserves of rare earths of 6.9 million tons, the U.S. Geological Survey says, but only mines a fraction because private companies make limited investments. A government campaign launched in April, the National Critical Mineral Mission, aims to attain self-reliance in the sector. In recent years, it has begun exploration for neodymium, a rare earth widely used in magnets for the auto industry. India also exports neodymium to Japan for lack of domestic processing capability, two of the sources said. Commercially available export data showed India exported nearly $7 million worth of the rare earth material to Toyota Tsusho between January and April. This week, Modi's office discussed the impact of the magnet crisis on the small but fast-growing EV sector, to which investors have committed billions of dollars, a person familiar with the talks said. It also weighed the possibility of tariff exemptions for imports of machines required by domestic manufacturers, the source said, adding, "The government is looking into it critically. They are serious." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Automotive
- Yahoo
India plans rare earth magnet incentives as supply threat mounts, sources say
By Aditi Shah, Neha Arora and Aditya Kalra NEW DELHI (Reuters) -India is holding talks with companies to establish long-term stockpiles of rare earth magnets by offering fiscal incentives for domestic production, people familiar with the matter said. Building such a supply chain could take years, but would reduce India's dependence on shipments from China, which sent shockwaves across global industries, particularly autos, with its April 4 move to curb exports of rare earth materials. China controls 90% of the processing of such magnets, also used in industries such as clean energy and defence. Now Prime Minister Narendra Modi's government wants to develop domestic manufacturing capabilities and is considering offering production-based fiscal incentives to companies, said two sources who sought anonymity as the talks are private. The scheme, being drafted by the ministry of heavy industries, also envisions partly funding the difference between the final price of the made-in-India magnet and the cost of the Chinese imports, the first source said. This would help achieve cost parity and boost local demand, the source said, adding that funding for the scheme has yet to be decided, with the government likely to meet industry officials next week to finalise the details. The heavy industries ministry did not respond to Reuters' queries. Although a state-run firm, IREL, has been mining rare earth materials for years, these are mainly used by the atomic energy and defence units, with most supplies for other uses still imported from China. India's move comes as auto companies the world over flag risks that they could face supply disruptions within days. In Japan, Suzuki Motor, has suspended production of its Swift car because of China's curbs. In India, auto industry body SIAM has privately told the government it expects production "to come to a grinding halt" within a timeframe starting from the end of May or early June. The heavy industries ministry also plans to send a delegation of auto industry executives to meet officials in Beijing to push for faster approvals, with two industry officials warning that was the only near-term solution. "The short-term solution has to be to get Chinese authorities to clear things," said one of the executives, who fears shortages at his company. "A radical shift in supply chain is not possible in the short term." Some auto companies and their suppliers will be able to stretch operations until the end of June, after which the situation will turn "really scary", said the second executive, adding it would affect not just electric cars but all vehicles. India has the world's third-largest reserves of rare earths of 6.9 million tons, the U.S. Geological Survey says, but only mines a fraction because private companies make limited investments. A government campaign launched in April, the National Critical Mineral Mission, aims to attain self-reliance in the sector. In recent years, it has begun exploration for neodymium, a rare earth widely used in magnets for the auto industry. India also exports neodymium to Japan for lack of domestic processing capability, two of the sources said. Commercially available export data showed India exported nearly $7 million worth of the rare earth material to Toyota Tsusho between January and April. This week, Modi's office discussed the impact of the magnet crisis on the small but fast-growing EV sector, to which investors have committed billions of dollars, a person familiar with the talks said. It also weighed the possibility of tariff exemptions for imports of machines required by domestic manufacturers, the source said, adding, "The government is looking into it critically. They are serious."
Zawya
5 days ago
- Business
- Zawya
India plans rare earth magnet incentives as supply threat mounts, sources say
India is holding talks with companies to establish long-term stockpiles of rare earth magnets by offering fiscal incentives for domestic production, people familiar with the matter said. Building such a supply chain could take years, but would reduce India's dependence on shipments from China, which sent shockwaves across global industries, particularly autos, with its April 4 move to curb exports of rare earth materials. China controls 90% of the processing of such magnets, also used in industries such as clean energy and defence. Now Prime Minister Narendra Modi's government wants to develop domestic manufacturing capabilities and is considering offering production-based fiscal incentives to companies, said two sources who sought anonymity as the talks are private. The scheme, being drafted by the ministry of heavy industries, also envisions partly funding the difference between the final price of the made-in-India magnet and the cost of the Chinese imports, the first source said. This would help achieve cost parity and boost local demand, the source said, adding that funding for the scheme has yet to be decided, with the government likely to meet industry officials next week to finalise the details. The heavy industries ministry did not respond to Reuters' queries. Although a state-run firm, IREL, has been mining rare earth materials for years, these are mainly used by the atomic energy and defence units, with most supplies for other uses still imported from China. India's move comes as auto companies the world over flag risks that they could face supply disruptions within days. In Japan, Suzuki Motor, has suspended production of its Swift car because of China's curbs. In India, auto industry body SIAM has privately told the government it expects production "to come to a grinding halt" within a timeframe starting from the end of May or early June. The heavy industries ministry also plans to send a delegation of auto industry executives to meet officials in Beijing to push for faster approvals, with two industry officials warning that was the only near-term solution. "The short-term solution has to be to get Chinese authorities to clear things," said one of the executives, who fears shortages at his company. "A radical shift in supply chain is not possible in the short term." Some auto companies and their suppliers will be able to stretch operations until the end of June, after which the situation will turn "really scary", said the second executive, adding it would affect not just electric cars but all vehicles. India has the world's third-largest reserves of rare earths of 6.9 million tons, the U.S. Geological Survey says, but only mines a fraction because private companies make limited investments. A government campaign launched in April, the National Critical Mineral Mission, aims to attain self-reliance in the sector. In recent years, it has begun exploration for neodymium, a rare earth widely used in magnets for the auto industry. India also exports neodymium to Japan for lack of domestic processing capability, two of the sources said. Commercially available export data showed India exported nearly $7 million worth of the rare earth material to Toyota Tsusho between January and April. This week, Modi's office discussed the impact of the magnet crisis on the small but fast-growing EV sector, to which investors have committed billions of dollars, a person familiar with the talks said. It also weighed the possibility of tariff exemptions for imports of machines required by domestic manufacturers, the source said, adding, "The government is looking into it critically. They are serious." (Reporting by Aditi Shah; Editing by Clarence Fernandez)
Mint
24-04-2025
- Automotive
- Mint
MHI considers subsidy push for e-trucks in greener closed loop operations
New Delhi: The ministry of heavy industries (MHI) is working on a plan to incentivize electric trucks operating in what are called closed loop operations under the ₹ 10,900 crore PM E-drive scheme, according to two persons aware of the development. A closed loop operation refers to these zero-emission vehicles running on shorter routes, with a focus on recycling energy, and reducing wastage through automated systems. This comes in the backdrop of Union government allocating ₹ 500 crore towards reducing e-truck ownership costs under the electric vehicle (EV) subsidy scheme announced in October 2024. Stakeholder consultations for the rollout of e-truck subsidies are in progress, and incentivising these vehicles in closed loop operations was also discussed along with manufacturers, said one of the persons mentioned above, requesting anonymity. Also read | Maharashtra orders shutting down of 121 unauthorized Ola Electric stores As part of these consultations, the government is also considering two subsidy models for e-trucks, either ₹ 5,000 per kilowatt-hour of battery size, or ₹ 7,500 per kilowatt-hour. This could provide e-truck buyers with a maximum one-time incentive of ₹ 19 lakh per unit, according to the persons mentioned above. Battery recycling is a crucial part of closed loop e-truck operations. Companies which use e-trucks can recycle their used batteries to extract critical minerals such as lithium, cobalt, and manganese. A November 2024 McKinsey study on e-trucks said that most large truck manufacturers are likely to pursue strategic partnerships for recycling in a closed loop. This would allow the truck maker to retain control over the metals in the battery throughout the life cycle, the study said. PM E-drive continues the model of previous incentive schemes such as the two iterations of the Faster Adoption and Manufacturing of Electric (and Hybrid) vehicles, where the manufacturers sell EVs at a subsidized price, and the government reimburses them for the difference. Also read | After decades making ICE parts, they decided to make EVs. It hasn't gone well The subsidy plan for e-trucks comes at a time when e-truck manufacturers in India are dealing with squeezed margins compared with their global counterparts. Indian manufacturers operate with Ebitda margins typically below 10%, while their US and European counterparts achieve 12-15%, an April 2025 report by the Niti Aayog said. "Financial support and R&D subsidies are crucial to help Indian truck OEMs invest in advanced fuel technologies without financial strain," the report said. It added that making standardized battery packs for e-trucks was a challenge due to unreliable supplies and cost of raw material such as lithium, manganese, and cobalt. "Developing alternative materials and recycling programmes can stabilize the supply chain for key raw materials like lithium, cobalt, nickel, and manganese," the report suggested. E-trucks were identified as a sunrise sector for government subsidies under the PM E-drive scheme in an effort to reduce carbon emissions in the freight industry. But, with less than a year left in the scheme and localization guidelines for the zero-emission trucks yet to be notified, progress has been marginal. Also read | Why battery swapping for EVs remains a non-starter in India Mint reported on 6 April that the government was rushing to identify industries which could generate demand for e-trucks including steel, logistics, and ports. This came after e-truck makers had asked the ministry of heavy industries for an 18-month period to comply with localization norms under the scheme in November 2024. E-truck subsidies are deemed important due to the high upfront cost of buying such vehicles. 'E-trucks are significantly more expensive upfront—sometimes costing up to four times more than diesel counterparts," said Dhiraj Agarwal, chief business officer, Mufin Green Finance , a company that lends towards EVs.
