The Union Cabinet on Wednesday approved a Rs 7,280 crore scheme to promote the domestic manufacturing of sintered Rare Earth Permanent Magnets (REPM), marking India’s first-ever initiative to build an integrated REPM ecosystem. The scheme aims to strengthen self-reliance, reduce import dependence, and position India as a competitive global player in the fast-growing REPM market.
Chaired by Prime Minister Narendra Modi, the Cabinet cleared the scheme with the goal of establishing 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in the country. These magnets—among the strongest permanent magnets globally—are essential for electric vehicles, renewable energy systems, electronics, aerospace, and defence.
Key highlights of the approval
The scheme will enable end-to-end manufacturing, including:
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Conversion of rare earth oxides into metals
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Conversion of metals into alloys
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Production of finished sintered REPMs
India’s demand for REPMs is expected to double by 2030, driven by EV adoption, renewable energy expansion, industrial applications, and consumer electronics. Currently, much of this demand is met through imports.
Financial structure of the scheme
The total outlay of Rs 7,280 crore includes:
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Rs 6,450 crore in sales-linked incentives over five years
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Rs 750 crore as capital subsidy for setting up a combined 6,000 MTPA capacity
The government will allocate capacity to five beneficiaries, each eligible for up to 1,200 MTPA, through a global competitive bidding process.
Implementation timeline
The scheme will run for seven years, consisting of:
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2-year gestation period to establish integrated REPM facilities
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5-year incentive disbursement window based on sales
Strategic impact
This initiative is expected to generate employment, secure supply chains for key sectors, and reduce India’s reliance on imported REPMs. It also supports the Atmanirbhar Bharat Abhiyan and contributes to the nation’s Net Zero 2070 commitments.
The government emphasised that the scheme represents a significant step toward building a technologically self-reliant, globally competitive, and sustainable industrial base, aligning with the broader vision of Viksit Bharat @2047.
