The Indian Union Cabinet is providing a total of INR 7,280 crore (USD 815.0 million) scheme, which is designed to promote the country’s manufacturing prowess of rare-earth permanent magnets. The country’s Prime Minister, Narendra Modi, has given his approval for the initiative, popularly known as “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets.”
The main agenda of the scheme is to boost domestic production, reduce dependency on imports and uphold sectors like electronics, automotive and renewable energy.
Information and Broadcasting Minister Ashwini Vaishnaw told reporters, “The scheme will promote the manufacturing of rare-earth permanent magnets. The aim is to create a capacity of 6,000 MTPA (metric tonne per annum)."
Within industries like electric vehicles, aerospace, electronics, medical devices and defence, the rare earth magnets are considered to be highly vital, where the primary focus of the initiative will be made upon. The agreed scheme will be distributed among five beneficiaries through a competitive global bidding process, with each participant eligible for up to 1,200 MTPA.
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In a span of seven years, the entire program will take place, starting with a two-year setup phase, which shall focus on establishing a comprehensive Rare Earth Permanent Magnets (REPM) manufacturing facility. This will then be followed by five years of incentive payments tied to the sales of REPM.
According to Raju Kumar, Partner and Energy Tax Leader, EY India, stated, “The announcement of incentives for rare-earth magnets, along with allocations in National Critical Minerals Mission, signals a broader national commitment to building a secure, competitive critical-minerals ecosystem. The proposed support for magnet manufacturing, a segment where India has historically depended on global supply chains, can unlock new opportunities across mining, processing, alloying and advanced materials. It creates headroom for Indian companies to participate in high-value applications spanning electric mobility, renewables, electronics and defence.”
He further added, “The real test now is disciplined implementation: ensuring access to technology, developing high-quality processing capability, building responsible mining practices and maintaining ESG safeguards. If executed well, this initiative can help strengthen India’s long-term energy-transition and manufacturing competitiveness."
From the total budget, INR 6,450 crore (USD 721.9 million) will be used for sales-linked initiatives. Additionally, INR 750 crore (USD 83.9 million) will be put towards setting up the manufacturing facility.
The government has announced an initiative aimed at boosting India’s tech capabilities and creating a competitive manufacturing environment on a global scale, all in line with the ambitious vision of Viksit Bharat 2047. This initiative is set to create jobs, attract new investments, and enhance India’s standing as a rising player in the global rare earth magnet market.
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