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Union Cabinet approves ₹7,280-crore scheme to manufacture rare earth magnets in India

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The Union Cabinet of India, chaired by Prime Minister Narendra Modi, has approved a ₹7,280 crore scheme to promote the manufacturing of Sintered Rare Earth Permanent Magnets (REPM) domestically. This initiative aims to establish integrated manufacturing facilities with a total capacity of 6,000 Metric Tons Per Annum (MTPA), distributed among five beneficiaries through a global competitive bidding process, each allocated up to 1,200 MTPA. The scheme spans seven years, including a two-year period for setting up manufacturing units and five years for disbursing sales-linked incentives. The financial outlay includes ₹6,450 crore in sales-linked incentives and ₹750 crore as capital subsidy to support the creation of these facilities. This move is designed to reduce India's heavy reliance on imports, particularly from China, for rare earth magnets, which are critical components in electric vehicles, renewable energy, industrial applications, and consumer electronics. India’s demand for REPMs is expected to double by 2030, making domestic production crucial for self-reliance and supply chain security.

The scheme is a strategic step towards positioning India as a significant player in the global rare earth magnet market while supporting the country’s commitment to achieving Net Zero emissions by 2070. By fostering indigenous manufacturing capabilities, the government aims to build a technologically advanced, globally competitive, and sustainable industrial base. The initiative is also expected to generate employment and strengthen the domestic industrial ecosystem. The approval reflects the government’s broader vision of Atmanirbhar Bharat (self-reliant India) and aligns with the goal of Viksit Bharat by 2047. This first-of-its-kind scheme marks a historic decision to develop a comprehensive rare earth magnet manufacturing ecosystem within India, reducing import dependence and enhancing strategic autonomy in critical technology sectors.

Why it matters:

  • Reduces India's dependence on imports for rare earth magnets
  • Supports India's Net Zero 2070 environmental commitment

Key Points

  • ₹7,280 crore scheme approved to promote domestic manufacturing of rare earth permanent magnets
  • Establishes 6,000 MTPA integrated manufacturing capacity distributed among five beneficiaries
  • Includes ₹6,450 crore sales-linked incentives and ₹750 crore capital subsidy
  • Scheme duration is 7 years with 2 years for setup and 5 years for incentive disbursement
  • Aims to meet growing demand from electric vehicles, renewable energy, and electronics sectors
  • Enhances India's self-reliance and global competitiveness in rare earth magnet production

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Summary

The Union Cabinet of India, chaired by Prime Minister Narendra Modi, has approved a ₹7,280 crore scheme to promote the manufacturing of Sintered Rare Earth Permanent Magnets (REPM) domestically. This initiative aims to establish integrated manufacturing facilities with a total capacity of 6,000 Metric Tons Per Annum (MTPA), distributed among five beneficiaries through a global competitive bidding process, each allocated up to 1,200 MTPA. The scheme spans seven years, including a two-year period for setting up manufacturing units and five years for disbursing sales-linked incentives. The financial outlay includes ₹6,450 crore in sales-linked incentives and ₹750 crore as capital subsidy to support the creation of these facilities. This move is designed to reduce India's heavy reliance on imports, particularly from China, for rare earth magnets, which are critical components in electric vehicles, renewable energy, industrial applications, and consumer electronics. India’s demand for REPMs is expected to double by 2030, making domestic production crucial for self-reliance and supply chain security.

The scheme is a strategic step towards positioning India as a significant player in the global rare earth magnet market while supporting the country’s commitment to achieving Net Zero emissions by 2070. By fostering indigenous manufacturing capabilities, the government aims to build a technologically advanced, globally competitive, and sustainable industrial base. The initiative is also expected to generate employment and strengthen the domestic industrial ecosystem. The approval reflects the government’s broader vision of Atmanirbhar Bharat (self-reliant India) and aligns with the goal of Viksit Bharat by 2047. This first-of-its-kind scheme marks a historic decision to develop a comprehensive rare earth magnet manufacturing ecosystem within India, reducing import dependence and enhancing strategic autonomy in critical technology sectors.

Why It Matters

Reduces India's dependence on imports for rare earth magnets
Supports India's Net Zero 2070 environmental commitment

Key Points

  • ₹7,280 crore scheme approved to promote domestic manufacturing of rare earth permanent magnets
  • Establishes 6,000 MTPA integrated manufacturing capacity distributed among five beneficiaries
  • Includes ₹6,450 crore sales-linked incentives and ₹750 crore capital subsidy
  • Scheme duration is 7 years with 2 years for setup and 5 years for incentive disbursement
  • Aims to meet growing demand from electric vehicles, renewable energy, and electronics sectors
  • Enhances India's self-reliance and global competitiveness in rare earth magnet production

Source: www.thehindu.com

Original Publish Date: 26/11/2025

Entities: Union Cabinet, Prime Minister Narendra Modi, Government of India