This initiative aims to establish 6,000 MTPA of REPM capacity, drastically reducing India's dependence on imports and positioning the nation as a key player in the global high-tech magnet market.
In a significant move towards self-reliance in strategically vital materials, the Union Cabinet, led by Prime Minister Shri Narendra Modi, sanctioned the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' with an outlay of Rs. 7,280 crore. The announcement, made on November 26, marks India's first fully integrated effort to build a robust domestic REPM manufacturing ecosystem.
Rare Earth Permanent Magnets (REPMs) are recognized as one of the strongest permanent magnets globally. They are indispensable for high-efficiency applications, forming the silent backbone of Electric Vehicle (EV) motors, wind turbine generators, consumer electronics, and sensitive defense and aerospace equipment. India currently meets nearly all of its REPM demand through imports, a dependency the new scheme is designed to break.
The financial allocation of Rs. 7,280 crore is structured to drive private investment and scale domestic production. It includes Sales-Linked Incentives (SLI) of Rs. 6,450 crore to be disbursed over five years on REPM sales, and a Capital Subsidy of Rs. 750 crore to support the initial setup of integrated manufacturing facilities.
The core objective of the scheme is to build an aggregate Rare Earth Permanent Magnet (REPM) production capacity of 6,000 Metric Tons per Annum (MTPA). Critically, the scheme focuses on integrated facilities, encompassing the entire value chain:
• Conversion of rare earth oxides to metals
• Transformation of metals to alloys
• Final production of finished REPMs
This integrated approach is vital, as simply producing finished magnets without controlling the upstream conversion processes leaves the supply chain vulnerable to external geopolitical risks, especially given the global control over rare earth processing.
The capacity will be allocated to five beneficiaries through a global competitive bidding process, with each selected manufacturer receiving up to 1,200 MTPA of capacity. The scheme duration is seven years: a two-year gestation period for facility setup, followed by five years for the sales-linked incentive payout.
Industry experts have hailed the initiative as a strategic intervention that will not only foster high-skilled employment but also insulate domestic manufacturers from global supply chain shocks. The move is expected to attract cutting-edge technology and substantial private investment, solidifying India’s position in the high-tech, advanced materials domain.
