Cabinet Approves Rs.7,280 Crore Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets
Government Initiative to Establish Domestic REPM Manufacturing Capacity
The Union Cabinet chaired by Prime Minister Shri Narendra Modi approved the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets with a financial outlay of Rs.7280 crore. The initiative aims to create 6,000 Metric Tons per Annum of integrated Rare Earth Permanent Magnet manufacturing capacity in India to enhance self-reliance and strengthen the country’s position in the global REPM market.
Importance of REPMs and Scope of the Scheme
Rare Earth Permanent Magnets are among the strongest permanent magnets and are used in electric vehicles, renewable energy systems, electronics, aerospace, and defence. The scheme will facilitate the development of integrated manufacturing facilities that cover the conversion of rare earth oxides into metals, metals into alloys, and alloys into finished magnets.
With rising demand from electric mobility, renewable energy, industrial usage, and consumer electronics, India’s consumption of REPMs is projected to double by 2030 from 2025. Currently, domestic requirements are met largely through imports. The initiative will enable the establishment of India’s first integrated REPM manufacturing facilities, support employment, and contribute to the country’s target of achieving Net Zero by 2070.
Financial Structure and Capacity Allocation
The scheme’s financial outlay of Rs.7280 crore includes sales-linked incentives of Rs.6450 crore for a period of five years and a capital subsidy of Rs.750 crore for creating a total manufacturing capacity of 6,000 MTPA. The proposed capacity will be distributed among five beneficiaries selected through a global competitive bidding process, with each being allotted up to 1,200 MTPA.
Implementation Timeline
The total duration of the scheme is seven years from the date of award. This period includes a two-year gestation phase for setting up integrated REPM manufacturing units and five years dedicated to incentive disbursement based on magnet sales.
The initiative is intended to strengthen the domestic REPM manufacturing ecosystem, enhance supply chain security for key industries, and support national goals related to sustainability and industrial development.