India Approves ₹7,280 Crore Rare-Earth Magnet Plan

The Union Cabinet approved a ₹7,280 crore scheme to create India’s first integrated manufacturing ecosystem for rare-earth permanent magnets, aiming to end import dependence and become self-reliant within three to four years.

The programme allocates ₹6,450 crore in sales-linked incentives over five years and a ₹750 crore capital subsidy to establish up to 6,000 metric tonnes per annum of cumulative capacity. The government will select five beneficiaries through global competitive bidding, with each eligible for up to 1,200 MTPA. The seven-year scheme includes a two-year gestation period for plant construction followed by five years of incentive support, and both public and private firms can participate.

Rare-earth permanent magnets are critical for electric vehicle motors, wind turbines, aerospace, defence and advanced electronics. Despite significant rare-earth reserves, India currently exports raw materials and imports finished magnets, largely from China, Japan and Australia. The new policy supports end-to-end production — from oxide conversion and alloying to magnet finishing — and anticipates domestic demand doubling between 2025 and 2030.

Officials said rapid guideline release and execution are priorities. Strategic partnerships with countries such as Australia and Japan are expected for technology and processing know-how. If implemented on schedule, the scheme could secure domestic supply chains and position India as a global REPM supplier.