Why India Approves ₹7,280-Crore for New Rare-Earth Magnet Scheme
India Approves ₹7,280-Crore Rare-Earth Magnet Scheme: A Game-Changer for Domestic Manufacturing
In a major push towards technological self-reliance, the Union Cabinet has approved a ₹7,280-crore scheme to develop India’s first integrated ecosystem for sintered rare-earth permanent magnets (REPMs). Cleared on 26 November 2025, this initiative positions India to reduce its import dependence and strengthen critical sectors like EVs, renewable energy, electronics, aerospace and defence.
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Massive Manufacturing Push: What the Scheme Targets
The newly approved programme aims to build 6,000 metric tonnes per annum (MTPA) of domestic REPM manufacturing capacity — a major leap for a country that has so far relied heavily on imports.
Key elements include:
✔ Global Bidding for Five Manufacturing Units
- Up to five companies will be selected through global competitive bidding.
- Each unit can produce up to 1,200 MTPA, ensuring diversification and scalability.
✔ Attractive Financial Incentives
- ₹750 crore allotted as capital subsidy to help companies set up integrated facilities.
- ₹6,450 crore reserved for sales-linked incentives over five years, rewarding actual production and sales of REPMs.
✔ Seven-Year Scheme Timeline
- 2 years for building and commissioning fully integrated plants.
- 5 years of incentive-backed production support.
This structure is designed to attract global players, boost domestic manufacturing, and ensure long-term sustainability.
Why Rare-Earth Magnets Matter for India’s Future
Rare-earth permanent magnets — especially neodymium and samarium-based magnets — are some of the strongest magnets known to science. They power technologies that define modern industry:
- Electric vehicle motors
- Wind turbine generators
- Consumer electronics
- Aerospace components
- Defence systems
- Medical equipment
Given their importance, a stable supply chain is critical for India’s industrial growth.
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India’s Strategic Need: Reducing Dependence on Imports
India currently imports most of its REPM requirements from a handful of countries that dominate the global supply chain. With rising geopolitical uncertainties and export restrictions by major producers, supply disruptions have become a serious concern.
The new scheme aims to:
✔ Strengthen supply-chain security
By producing REPMs domestically, India reduces reliance on unpredictable foreign markets.
✔ Boost high-growth sectors
Industries such as EVs, renewable energy, electronics manufacturing, aerospace, and defence will benefit directly from reliable access to magnets.
✔ Advance national missions
The initiative supports:
- Atmanirbhar Bharat (self-reliant India)
- Net-zero emissions goals
- Domestic value-chain creation
Global Context: Rising Tensions Drive Urgent Action
Worldwide, countries are competing to secure rare-earth resources. A few nations control most of the mining, processing, and exporting of REPMs. Export curbs, geopolitical rivalry, and rising demand have intensified concerns.
Industries within India — from automakers to turbine manufacturers — have repeatedly warned about risks from supply shortages or price spikes. The Cabinet’s decision comes as a direct, strategic response to these global pressures.
Implementation Challenges to Watch; Why India Approves ₹7,280-Crore for New Rare-Earth Magnet Scheme.
While the scheme is ambitious and transformative, its success hinges on:
- Access to reliable rare-earth oxide feedstock
- Setting up advanced processing and metallization technology
- Maintaining global quality standards
- Ensuring strong performance monitoring and compliance from selected firms
Given the significant 6,000 MTPA capacity target, scaling up smoothly will be crucial.
Conclusion: Why India Approves ₹7,280-Crore for New Rare-Earth Magnet Scheme.
A Historic Step Towards Industrial Independence
The approval of the ₹7,280-crore REPM manufacturing programme marks a defining moment in India’s industrial journey. By investing in a critical, high-tech material that powers the future of clean energy, mobility, electronics and defence, India is laying the foundation for long-term economic and technological independence.
If executed effectively, this scheme could transform India into a global hub for rare-earth magnet manufacturing, strengthen its strategic resilience, and accelerate its shift towards a greener, more self-reliant industrial future.
