The Union Cabinet has approved a ₹7,280 crore national initiative to develop India’s domestic manufacturing ecosystem for sintered Rare Earth Permanent Magnets (REPM)—a critical component used across clean energy, mobility, and defence technologies. The approval marks India’s first structured effort to build capacity in a sector currently dominated by global suppliers.
First-of-its-Kind National Magnet Production Framework
The decision, taken on November 26, 2025 under the leadership of Prime Minister Narendra Modi, aims to establish an annual production capacity of 6,000 metric tonnes of REPMs through fully integrated facilities. These magnets are indispensable in emerging sectors such as:
- Electric vehicles and hybrid powertrains
- Wind turbines and renewable energy storage systems
- Aerospace, satellites, and guided defence systems
- High-efficiency industrial automation equipment
India currently relies heavily on imports to meet its magnet requirements, making the initiative strategically important for both economic and national security considerations.
Incentive Structure and Implementation Plan
The scheme includes:
- ₹6,450 crore earmarked as sales-based incentives
- ₹750 crore allocated as capital support
The programme will run for seven years, including a two-year setup phase followed by five years of incentive-linked production support.
Up to five manufacturers will be shortlisted through a global competitive selection process, with each eligible for up to 1,200 MTPA production capacity allocation.
Strengthening India’s Supply Chain and Clean Energy Roadmap
Demand for rare earth magnets in India is expected to double by 2030, fuelled by rapid growth in electric mobility, high-efficiency motors, and renewable grid infrastructure. Establishing a domestic value chain—from rare earth oxide processing to finished magnets—will reduce import dependence and safeguard industrial resilience.
The initiative also supports key national mandates, including:
- Atmanirbhar Bharat (Self-Reliant India)
- Make in India manufacturing acceleration
- India’s Net Zero 2070 emission commitment
By fostering advanced materials manufacturing capability, the programme positions India as a competitive participant in the global clean energy and strategic materials ecosystem.
Summary
The Cabinet’s approval of India’s first ₹7,280 crore Rare Earth Permanent Magnet manufacturing scheme aims to reduce import reliance, support emerging technology sectors, and boost industrial competitiveness. With integrated value chain development, sales-linked incentives, and a seven-year rollout framework, the initiative is expected to accelerate India’s progress toward clean energy goals, supply chain security, and technological self-sufficiency.
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