The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved a landmark ₹7,280 crore “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM).” This first-of-its-kind initiative marks a decisive step towards self-reliance in a critical technology that underpins India’s transition to clean energy and advanced manufacturing.
The primary objective of the scheme is to establish an integrated domestic manufacturing capacity of 6,000 Metric Tons per Annum (MTPA) of REPMs. These magnets are vital components for the rapidly expanding electric vehicle (EV) and renewable energy sectors, including wind turbines. With India’s consumption of REPMs expected to double by 2030, driven by aggressive decarbonization goals and the EV boom, creating a secure domestic supply chain is a strategic imperative.
REPMs are known as the strongest type of permanent magnets and are essential for high-efficiency electric motors and generators used in modern applications. They are indispensable for EV traction motors, crucial for reliable power generation in wind energy systems, and foundational components for electronics, aerospace, and defence applications. Currently, India meets most of its REPM demand through imports, leaving its strategic sectors vulnerable to global supply chain disruptions.
The scheme aims to reverse this reliance by promoting integrated manufacturing—a process that covers every stage, from converting rare earth oxides into metals and alloys, right up to producing the finished magnets.
The financial outlay of ₹7,280 crore is structured to encourage investment and production. This includes a substantial ₹6,450 crore in sales-linked incentives (PLI-style) disbursed over five years based on REPM sales, and an additional ₹750 crore as a capital subsidy to help beneficiaries set up their state-of-the-art facilities.
The total manufacturing capacity of 6,000 MTPA will be allocated to a maximum of five beneficiaries, each receiving up to 1,200 MTPA, through a global competitive bidding process. The total duration of the scheme is seven years, allowing for a two-year gestation period for setting up the complex manufacturing unit and five years for the sales incentive disbursement.
By fostering indigenous capabilities in REPM production, the government is not only securing the supply chain for domestic industries like automotive and aerospace but also actively supporting the ambitious Net Zero 2070 commitment. The initiative reinforces the goals of the Atmanirbhar Bharat Abhiyan, positioning India as a key player in the global REPM market and accelerating the vision of Viksit Bharat @2047 through a technologically competitive and sustainable industrial base.
