The Union Cabinet has cleared a ₹7,280 crore scheme to establish India’s first full-scale manufacturing ecosystem for sintered rare-earth permanent magnets (REPM), marking a major strategic move toward self-reliance in clean-energy and high-tech supply chains. These magnets are critical components for electric vehicles, renewable power systems, electronics, aerospace equipment, and defence technologies, yet India has remained almost entirely dependent on imports for its requirements.
The new scheme aims to change that by enabling the creation of an end-to-end domestic value chain for REPM production, from processing rare-earth oxides to manufacturing finished high-performance magnets.
Why Rare-Earth Magnets Matter for India’s Industrial Future
REPMs are among the strongest permanent magnets known and are essential for technologies that drive the next wave of global manufacturing. India’s demand for these magnets is expected to double by 2030, powered by electric mobility expansion, renewable energy deployment, electronics manufacturing, and aerospace growth.
Until now, India imported nearly all its REPM requirements, creating a clear vulnerability in strategic sectors. The Cabinet’s decision signals a decisive shift toward domestic capability-building and supply chain security, especially as countries worldwide race to secure critical materials.
Funding Structure and Production Targets
Of the ₹7,280 crore allocated:
• ₹6,450 crore will be offered as sales-linked incentives over five years
• ₹750 crore has been designated as capital subsidy for setting up factories
The scheme seeks to create an integrated capacity of 6,000 MTPA, with up to five global or domestic beneficiaries selected through competitive bidding. Each approved manufacturer may be allocated the capacity to produce up to 1,200 MTPA of REPM.
The total duration of the scheme is seven years, including a two-year gestation period to set up facilities and five years of incentive disbursement.
Boost to Atmanirbhar Bharat and Clean-Tech Ambitions
The initiative aligns with the country’s long-term industrial vision under Atmanirbhar Bharat as well as its net-zero roadmap. Domestic REPM production will strengthen the foundation for electric vehicles, solar and wind energy systems, robotics, and advanced electronics, all of which depend heavily on rare-earth magnet technologies.
Beyond industrial capability, the scheme is expected to generate skilled jobs, catalyse technology transfer, and support India’s position in the global REPM market at a time when demand is projected to surge.
Reducing Supply Chain Risks and Enhancing Competitiveness
By reducing import dependence on a globally concentrated supply chain, India aims to mitigate geopolitical risks and create long-term resilience for strategic industries. For manufacturers operating in EVs, renewable energy, drones, motors and defence, the scheme could significantly reduce costs, procurement delays and vulnerabilities caused by international disruptions.
Industry analysts believe this move positions India to not only meet domestic demand but potentially emerge as a credible supplier for global REPM requirements in the coming decade.