Union Cabinet Approves ₹7,280 Crore Scheme for Rare Earth Magnet Manufacturing
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a landmark ₹7,280 crore scheme to establish India’s first integrated manufacturing capacity for Sintered Rare Earth Permanent Magnets (REPMs). This initiative aims to create 6,000 metric tons per annum of production capacity, reducing import dependence and positioning India as a global player in critical magnet technology.
Key Takeaways
- ₹7,280 crore investment for 6,000 metric tons/year REPM capacity
- Five beneficiaries to be selected via global competitive bidding
- Scheme duration: 7 years (2-year setup + 5-year incentives)
- Expected to double domestic REPM consumption by 2030
What Are REPMs and Why They Matter?
Rare Earth Permanent Magnets are among the strongest permanent magnets available, essential for multiple strategic sectors:
- Electric vehicles and renewable energy systems
- Electronics, aerospace, and defence applications
- Industrial equipment and consumer electronics
The integrated manufacturing process will cover the entire value chain – from converting rare earth oxides to metals, metals to alloys, and finally to finished REPMs.
Financial Structure and Implementation
The ₹7,280 crore outlay includes:
- ₹6,450 crore in sales-linked incentives over five years
- ₹750 crore capital subsidy for establishing manufacturing facilities
Total capacity of 6,000 million tonnes per annum will be allocated to five beneficiaries, with each receiving up to 1,200 million tonnes capacity.
Strategic Importance
Currently, India relies primarily on imports for these critical magnets. With demand expected to double by 2030, this initiative will:
- Generate significant employment opportunities
- Strengthen self-reliance in strategic materials
- Support India’s Net Zero 2070 commitment
- Secure magnet supply chains for domestic industries
“This initiative by the Government of India is a landmark step towards strengthening the domestic REPM manufacturing ecosystem and enhancing competitiveness in the global markets. By fostering indigenous capabilities in REPM production, the scheme will not only secure the magnet supply chain for domestic industries but also support the nation’s Net Zero 2070 commitment. It embodies the Government’s unwavering commitment to build a technologically self-reliant, globally competitive, and sustainable industrial base, in line with the vision of Viksit Bharat @2047,” the Cabinet communique stated.
The scheme represents a crucial step in India’s journey toward technological self-reliance and global competitiveness in advanced manufacturing.
