India Announces ₹7,280 Crore Rare-Earth Magnet Scheme

The Government of India has approved a ₹7,280 crore incentive scheme to develop domestic rare-earth magnet manufacturing, aiming to cut reliance on imports and secure critical supply chains for electric vehicles, renewables, electronics and defence.

Rare-earth magnets, essential for high-torque EV drivetrains, wind-turbine generators and precision defence systems, are predominantly imported today. The new policy links financial incentives to production output, encouraging large-scale, commercially viable facilities that meet global quality standards and attract investment across the value chain—from rare-earth processing to magnet fabrication.

Officials expect the programme to accelerate localisation of key components, lower costs, and improve supply resilience as EV adoption and renewable deployment expand. The scheme is positioned to complement existing Production-Linked Incentive (PLI) efforts in autos, batteries and electronics, and to support Make in India and Atmanirbhar Bharat objectives.

Projected benefits include technology transfer, greater private and foreign investment, MSME supplier development, and job creation. Implementation will roll out in phases, with detailed guidelines and eligibility criteria to be published soon, as the government seeks to build a resilient, future-ready manufacturing ecosystem for clean and advanced technologies.