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India Clears Rs 72.80 Bn Rare Earth Permanent Magnets scheme
Articles- Dec 01,25
Auto industry welcomes the scheme, which comprises a sales-linked incentives of Rs 64.50 billion on Rare Earth Permanent Magnets (REPM) sales for five years and capital subsidy of Rs 7.50 billion for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities
The Union Cabinet has approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' with a financial outlay of Rs 72.80 billion. This first-of-its-kind initiative aims to establish 6,000 metric tonnes per annum (MTPA) of integrated rare earth permanent magnet (REPM) manufacturing in India, thereby enhancing self-reliance and positioning India as a key player in the global REPM market.
REPMs are one of the strongest types of permanent magnets and are vital for electric vehicles, renewable energy, electronics, aerospace, and defence applications. The scheme will support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs.
Driven by the rapidly growing demand from electric vehicles, renewable energy, industrial applications, and consumer electronics, India's consumption of REPMs is expected to double by 2030 from 2025. At present, India's demand for REPMs is met primarily through imports. With this initiative, India will establish its first ever integrated REPM manufacturing facilities, generating employment, strengthening self-reliance and advancing the nation's commitment to achieve Net Zero by 2070.
The total financial outlay of the scheme is Rs 72.80 billion, comprising a sales-linked incentives of Rs 64.50 billion on REPM sales for five years and capital subsidy of Rs 7.50 billion for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities. The scheme envisions allocating the total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allotted up to 1,200 MTPA of capacity.
The total duration of the scheme will be 7 years from the date of award, including a 2-year gestation period for setting up an integrated REPM manufacturing facility, and 5 years for incentive disbursement on the sale of REPM.
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 REPM supply chain for domestic industries but also support the nation’s Net Zero 2070 commitment. It embodies the Governments unwavering commitment to build a technologically self-reliant, globally competitive, and sustainable industrial base, in line with the vision of Viksit Bharat @2047.
Welcoming the Rare Earth Permanent Magnets (REPM) scheme, Shailesh Chandra, President, Society of Indian Automobile Manufacturers (SIAM), said, "The Indian Automobile industry welcomes the Government of India’s newly announced scheme to promote the domestic manufacturing of Rare Earth permanent magnets, with an allocated outlay of Rs 72.80 billion. This initiative is a significant step toward building a resilient and stable supply chain, particularly for components and sub-assemblies essential for the production of electrified vehicles. The scheme is expected to accelerate adoption of clean mobility solutions and support India’s broader sustainability goals. By strengthening indigenous manufacturing capabilities, it will contribute to reducing carbon emissions and lowering dependence on crude oil imports, further enhancing the nation’s energy security.”
Rare Earth Magnets
REPM
Manufacturing
Cabinet
EV Supply Chain
Defence
Aerospace
Atmanirbhar Bharat
Shailesh Chandra
SIAM
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