Centre Approves ₹7,280 Crore Scheme to Boost Rare Earth Magnet Manufacturing

In a major step towards strengthening India’s advanced manufacturing and clean-energy ecosystem, the Government has approved a ₹7,280 crore scheme to promote domestic manufacturing of Sintered Rare Earth Permanent Magnets (REPM).

The scheme aims to establish an integrated REPM manufacturing ecosystem with a capacity of 6,000 metric tonnes per annum (MTPA), covering the complete value chain from rare-earth oxides to finished magnets. These high-performance magnets are a critical input for sectors such as electric mobility, renewable energy, electronics, aerospace and defence.

According to the government, the initiative will significantly reduce India’s dependence on imports—currently dominated by China—and enhance self-reliance in strategic and high-technology sectors. Official data shows that imports met a large share of India’s permanent magnet demand in recent years, even as domestic consumption is projected to double by 2030.

Under the scheme, up to five beneficiaries will be selected through a global competitive bidding process, with each eligible to set up capacity of up to 1,200 MTPA. The incentive structure includes ₹6,450 crore as sales-linked incentives over five years and a ₹750 crore capital subsidy to support the establishment of advanced manufacturing facilities. The scheme will be implemented over seven years, including a two-year gestation period.

India has substantial rare-earth mineral resources, including monazite deposits across several states such as Andhra Pradesh, Odisha, Tamil Nadu, Kerala and Maharashtra, providing a strong raw-material base for downstream manufacturing.

The initiative aligns with national priorities such as Atmanirbhar Bharat, the National Critical Minerals Mission (NCMM), and India’s Net Zero 2070 vision. Rare earth magnets play a key role in energy-efficient motors, wind turbines and defence systems, making domestic capability crucial for both sustainability and national security.

The scheme also complements recent reforms under the Mines and Minerals (Development and Regulation) Act, which aim to strengthen India’s critical minerals ecosystem and encourage private participation.

Officials said the move will help India integrate into global advanced-materials value chains, attract technology-driven investment, generate employment and support long-term industrial growth, contributing to the broader vision of Viksit Bharat @2047.