The Union Cabinet on Wednesday approved a ₹7,280-crore scheme to promote the manufacturing of sintered Rare Earth Permanent Magnets (REPM), a critical component used across electric vehicles, renewable energy systems, aerospace, defence and electronics.
Chaired by Prime Minister Narendra Modi, the Cabinet cleared the “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets,” marking the first major government initiative to develop an integrated REPM ecosystem in India.
The scheme aims to create domestic capacity of 6,000 metric tonnes per annum (MTPA) of sintered REPMs, thereby enhancing self-reliance and positioning India as a key player in the global REPM market.
These magnets are considered among the strongest permanent magnets and are essential for several high-technology applications. Currently, India meets most of its REPM demand through imports.
Key Features of the Scheme:
* Total outlay: ₹7,280 crore
* Sales-linked incentives: ₹6,450 crore for a five-year period
* Capital subsidy: ₹750 crore for setting up 6,000 MTPA capacity
* Beneficiaries: Five companies to be selected through a global competitive bidding process
* Capacity allotment: Up to 1,200 MTPA for each beneficiary
* Scheme duration: Seven years – including a two-year gestation period for setting up facilities and five years for incentive disbursement
The scheme will support the establishment of fully integrated REPM manufacturing units covering the conversion of rare earth oxides into metals, metals into alloys, and alloys into finished magnets.
The demand for REPMs in India is rising rapidly due to growth in electric mobility, renewable energy installations, industrial machinery and consumer electronics. Government estimates suggest that India’s REPM consumption will double by 2030 compared to 2025 levels.
By enabling domestic production, the scheme aims to reduce import dependence, strengthen supply chains for critical sectors, generate employment, and enhance India’s position in the global magnet market.
The initiative is expected to support India’s Net Zero 2070 commitment by enabling local production of magnets used in green technologies, particularly EVs and wind energy. It also aligns with the government’s broader Atmanirbhar Bharat and Viksit Bharat @2047 goals by building a sustainable and competitive industrial base.
The scheme represents a “landmark step” toward building indigenous REPM capabilities and securing long-term supply for domestic industries.