Cabinet Approves ₹7,280 Crore Rare-Earth Magnet Scheme

The Union Cabinet has approved a ₹7,280-crore programme to kickstart domestic manufacture of sintered rare-earth permanent magnets (REPMs), a critical input for electric vehicles, wind turbines, defence systems and advanced electronics.

The initiative seeks to create an integrated manufacturing ecosystem with 6,000 MTPA aggregate capacity through a global competitive bidding process. Up to five firms will be selected, each allowed to build as much as 1,200 MTPA.

For the first time India plans an end-to-end value chain covering rare-earth oxides, rare-earth metals, magnet alloys and finished high-performance permanent magnets, aimed at reducing import dependence and strengthening supply-chain resilience.

Financial support includes ₹6,450 crore in sales-linked incentives over five years and a ₹750 crore capital subsidy for advanced plants. The scheme spans seven years, including a two-year gestation window for plant construction and technology deployment.

Officials highlight the timing as global demand for REPMs is expected to rise sharply through 2030, while current production is concentrated in China. The move is framed as both an industrial upgrade and a strategic step toward technological self-reliance under the Atmanirbhar Bharat agenda.