NEW DELHI, Feb. 3 -- Even as India pushes to localize rare earth supply chains, the Centre has budgeted Rs.140 crore in capital expenditure for the country's only domestic manufacturer of rare earth magnets and rare earth oxides-IREL (India) Ltd-in the next fiscal year, a modest 1.4% increase from FY26.

The muted allocation for the state-run producer, outlined in Union budget documents, has sparked questions about whether India is under-investing in its only operational domestic supplier at a moment when shortages are hitting industries from automobiles to electronics.

Some, however, say policymakers are prioritizing incentives and corridors to draw in private investment, even though most private plans have yet to materialize.

The inve...