India Approves ₹7,280-Crore Mission to Build First Integrated Rare Earth Magnet Industry

The new scheme seeks to reverse this trend by establishing 6,000 Metric Tons Per Annum (MTPA) of fully integrated manufacturing capacity within the country.

India has taken a decisive leap toward technological self-reliance with the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approving the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPMs)’. With an outlay of ₹7,280 crore, this landmark initiative aims to establish the country’s first large-scale integrated REPM manufacturing ecosystem, positioning India as a significant global supplier in a market currently dominated by a handful of countries.

A Strategic Push Toward Self-Reliance in Rare Earth Magnets

Rare Earth Permanent Magnets—one of the strongest types of industrial magnets—are indispensable to several high-tech, high-growth sectors including:

• Electric Vehicles (EVs)

• Renewable energy systems such as wind turbines

• Aerospace and defence

• Industrial automation

• Consumer electronics such as mobile phones and computers

Despite their importance, India has so far depended heavily on imports for REPMs. The new scheme seeks to reverse this trend by establishing 6,000 Metric Tons Per Annum (MTPA) of fully integrated manufacturing capacity within the country. This will involve the entire value chain—from converting rare earth oxides into metals, to alloy production, and ultimately to manufacturing finished permanent magnets.

Meeting Soaring Domestic and Global Demand

The global appetite for REPMs is accelerating rapidly, pushed by the worldwide transition to clean energy and electric mobility. India’s own consumption is expected to double by 2030 compared to 2025, driven by:

• Expansion of the EV sector under FAME and related policies

• Rising adoption of renewable energy technologies

• Industrial modernization and Make in India initiatives

• Growth in electronics and strategic defence manufacturing

Creating a domestic REPM ecosystem will not only support these expanding industries but also reduce import dependence, stabilize supply chains, and enhance India’s technological sovereignty.

Financial Structure: A Strong Incentive Framework

The ₹7,280-crore outlay includes:

• ₹6,450 crore for sales-linked incentives over 5 years

• ₹750 crore for capital subsidy to support the establishment of integrated facilities

These incentives are designed to ensure global competitiveness, promote economies of scale, and encourage industry leaders to invest in India’s rare earth magnet manufacturing sector.

Competitive Bidding and Capacity Allocation

The scheme will allocate manufacturing capacity to five beneficiaries through a global competitive bidding process. Each selected entity may receive up to 1,200 MTPA capacity, collectively forming the national target of 6,000 MTPA.

This approach ensures transparency, encourages world-class participation, and brings advanced expertise to India’s emerging REPM industry.

Implementation Timeline: Seven-Year Plan

The complete duration of the scheme is 7 years, comprising:

• 2-year gestation period for setting up integrated manufacturing units

• 5 years of incentive disbursement linked to production and sales

This timeline is structured to ensure adequate incubation, ramp-up time, and measurable performance-based support.

Advancing India’s Strategic and Climate Goals

The establishment of domestic REPM manufacturing marks a transformational step for India’s industrial and climate strategy:

Strengthening National Security

With defence and aerospace relying heavily on high-performance magnets, indigenous manufacturing will safeguard critical supply chains.

Supporting Net Zero Commitment

REPMs are vital to renewable energy and electric mobility—key pillars of India’s Net Zero 2070 ambition.

Building a High-Tech Industrial Base

The scheme aligns with the vision of Viksit Bharat @2047, fostering:

• Technological self-reliance

• Global competitiveness

• Job creation in advanced manufacturing

• Research and innovation in rare earth materials

A Landmark Initiative for India’s Future

By nurturing an end-to-end REPM manufacturing ecosystem for the first time in its history, India is set to secure its position in a strategically crucial global industry. The scheme reflects the government’s long-term commitment to building a resilient, sustainable, and innovation-driven industrial future.