The Union Cabinet has approved a major national initiative worth $815 million to scale up domestic production of sintered rare earth permanent magnets (REPM), a material that forms the backbone of advanced technologies ranging from electric vehicles to wind turbines and aerospace systems. The program aims to create an annual domestic manufacturing capacity of 6,000 metric tonnes, drastically reducing India’s dependence on imported magnets and securing its long-term supply needs.
The government emphasized that rare earth magnets are vital components for high-efficiency motors and energy-transition technologies, and global demand is projected to nearly double by 2030 compared with 2025 levels. By creating end-to-end capabilities—from converting rare earth oxides into metals, transforming metals into alloys, and finally producing finished magnets—the scheme is designed to build a resilient and competitive manufacturing ecosystem within the country.
Under the newly approved framework, a substantial portion of the funding will be directed toward sales-linked incentives totaling $722 million over a five-year period. These incentives are intended to reward actual production and encourage high-quality output that meets global standards. In addition, the scheme sets aside $84 million as a capital subsidy to offset the costs of establishing integrated facilities equipped with advanced technology.
The government will allocate production capacity to five selected manufacturers, each eligible to develop up to 1,200 metric tonnes per year. A global competitive bidding process will determine which companies qualify for support, ensuring that the program attracts the strongest industrial talent and technologically capable investors. The overall scheme will run for seven years, including a two-year setup phase followed by five years of incentive distribution.
Officials stated that this initiative aligns with India’s broader goals of building self-reliance in critical technologies, supporting clean-energy expansion, and strengthening supply chains for industries that will define the next decade—electric mobility, renewable energy, electronics, and defense manufacturing. By expanding domestic REPM capacity, India expects to generate new skilled jobs, foster innovation, and create opportunities for downstream industries.
The Cabinet’s approval positions India to become a significant player in the global magnet supply chain at a time when nations worldwide are racing to secure access to critical materials. The scheme not only supports industrial growth but also reinforces India’s commitment to achieving long-term sustainability and its Net Zero ambitions.
