India has approved a national scheme with a financial outlay of INR 72.8 billion to establish domestic capacity for producing sintered rare earth permanent magnets (REPM). The programme aims to build 6,000 metric tons per annum of integrated REPM manufacturing, spanning the conversion of rare earth oxides into metals, alloys, and final magnet products.
In an official statement, the government said the initiative is designed to strengthen supply chains for sectors such as automotive, aerospace, electronics, renewable energy, and defence by reducing import dependence and expanding domestic industrial capability.
The scheme includes INR 64.5 billion in sales-linked incentives to be disbursed over a five-year period, along with INR 7.5 billion in capital subsidies for setting up manufacturing capacity. The programme is expected to run for seven years from the date of award, including a two-year gestation period for facility establishment and five years for incentive release.
The government plans to allocate the total 6,000 metric ton capacity among five beneficiaries through a global competitive bidding process, with each selected company eligible for up to 1,200 metric tons of annual capacity. The initiative is structured to promote the creation of fully integrated REPM manufacturing units in India, covering all critical stages of production.
REPMs, known for their high magnetic strength and performance, are essential components in electric motors, wind turbines, industrial machinery, consumer electronics, and various strategic applications. Demand in India is projected to increase significantly by 2030, driven by expansion in electric vehicle (EV) manufacturing, renewable power equipment, and advanced electronics. The country currently meets most of its consumption through imports.
The government noted that establishing domestic capability in REPM manufacturing will improve supply chain resilience for key industries and support broader industrial and energy transition goals. The scheme is expected to facilitate investment, generate employment, and enable India to participate more competitively in global magnet manufacturing.
The initiative forms part of ongoing efforts to expand advanced materials production and develop strategic manufacturing capacity across multiple sectors.
