November 27, 2025: India has approved a ₹7,280-crore scheme to set up the country’s first integrated manufacturing base for sintered rare earth permanent magnets (REPMs), a move aimed at reducing import dependence and supporting key sectors that rely heavily on advanced magnet technology. The decision, cleared by the Union Cabinet chaired by Prime Minister Narendra Modi, positions India to build a strategic industrial capability considered essential for electric vehicles, renewable-energy systems, consumer electronics and defence equipment.
The scheme seeks to develop 6,000 metric tonnes per annum (MTPA) of REPM manufacturing capacity, covering the complete value chain, from conversion of rare earth oxides into metals, then to alloys, and finally to finished magnets. At present, India sources nearly all of its REPM requirements from overseas suppliers, despite rapidly growing domestic demand.
New ₹7,280 Cr Incentive Plan for Rare Earth Permanent Magnets Industry
Government officials noted that national consumption of rare-earth magnets is expected to double between 2025 and 2030, driven primarily by EV motors, wind turbines, industrial automation, and high-performance electronics. Building a domestic ecosystem, they said, is essential for long-term supply-chain security and for achieving the country’s climate and energy-transition targets.
The financial package under the REPM scheme consists of ₹6,450 crore in sales-linked incentives over five years and ₹750 crore in capital subsidies to support manufacturers in establishing production lines. A total capacity of 6,000 MTPA will be allocated to five companies, each eligible for up to 1,200 MTPA, through a global competitive bidding process. The overall scheme duration is seven years, including a two-year period for setting up integrated facilities and five years for disbursing incentives tied to verified sales.
Officials said the initiative is expected to create high-skilled jobs, reduce external vulnerabilities in critical minerals, and strengthen India’s position in emerging global supply chains for clean technology. It is also expected to support domestic industries preparing for large-scale electrification and renewable-energy expansion.
The government described the programme as a significant step toward developing a technologically advanced, self-reliant manufacturing base in line with the Viksit Bharat @2047 vision. By enabling indigenous Rare Earth Permanent Magnets production for the first time, the scheme is projected to enhance India’s competitiveness in global markets while advancing long-term economic and environmental goals.
