Cabinet approves ₹7,280 crore rare-earth magnet plan

The Union Cabinet approved a ₹7,280 crore scheme to establish 6,000 mtpa of integrated rare earth permanent magnet (REPM) capacity, aiming to secure critical supply chains and cut import dependence.

The programme supports fully integrated value chains — converting rare earth oxides to metals, processing alloys and manufacturing finished sintered REPMs — through ₹6,450 crore in sales-linked incentives over five years and a ₹750 crore capital subsidy. A global competitive bidding process will select five beneficiaries, each eligible for up to 1,200 mtpa. The scheme spans seven years, including a two-year gestation period and five years of incentive disbursal.

REPMs are among the strongest permanent magnets and are essential for electric vehicles, wind turbines, electronics, aerospace and defence systems. The move responds to concentrated global supply: China accounts for roughly 68.6% of rare earth output, creating vulnerability from export controls and licence delays.

India holds about 6.27% of global rare earth reserves but produces only 0.83% of output. Complementary measures include the National Critical Mineral Mission, 1,200 GSI exploration projects (FY25–FY31), coastal and river-sand surveys by the Atomic Minerals Directorate and IREL’s push to make high-purity rare earth oxides domestically.