A Landmark Move to Build Critical Magnet Capabilities
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a landmark ₹7,280 crore scheme to promote domestic manufacturing of Sintered Rare Earth Permanent Magnets (REPM)—a strategic industrial segment where India has long been dependent on imports. The initiative seeks to create an integrated REPM manufacturing ecosystem with an annual capacity of 6,000 MTPA, marking the country’s first significant move toward self-reliance in a technology vital for EVs, renewable energy, defense systems, and electronics.
Why Rare Earth Magnets Matter
REPMs are indispensable to modern high-tech applications: electric vehicle drivetrains, wind turbine generators, missile guidance systems, satellites, robotics, and advanced consumer electronics all rely on these powerful magnets. India currently imports almost all of its REPM requirements, largely from China. This dependence exposes India to major supply-chain vulnerabilities, particularly amid tightening geopolitical tensions and China’s intermittent export restrictions.
Scheme Structure: Incentives and Integrated Value Chain
The scheme’s financial architecture includes:
· ₹6,450 crore in sales-linked incentives over five years
· ₹750 crore in capital subsidies to set up integrated units
· A global competitive bidding process to identify five beneficiaries, each eligible for up to 1,200 MTPA capacity
The seven-year timeline allocates two years for establishing manufacturing units and five years for incentive-based production. Beyond incentives, the scheme emphasizes full value-chain coverage—from converting rare earth oxides into metals, to producing alloys, and finally manufacturing sintered REPM. This vertical integration is crucial for developing indigenous expertise and controlling quality and supply.
Strategic and Economic Impact
The initiative aligns with India’s broader strategic goals:
· National security: REPMs power critical defense technologies, reducing reliance on foreign suppliers.
· EV and renewable energy expansion: With REPM demand expected to double by 2030, domestic production will support India’s clean energy and mobility targets.
· Economic competitiveness: Indigenous REPM capability addresses one of the biggest chokepoints in India’s advanced manufacturing ecosystem.
· Geopolitical resilience: The move counters China’s export clampdowns, ensuring supply assurance for sensitive industries.
Information and Broadcasting Minister Ashwini Vaishnaw called the scheme a “strategic decision” aligned with Viksit Bharat @2047 and India’s Net Zero 2070 goals, highlighting its long-term developmental significance.
A Critical Step Toward Technological Sovereignty
India’s new REPM manufacturing scheme is more than an industrial initiative—it is a strategic investment in technological sovereignty, economic resilience, and future-ready manufacturing. By nurturing an end-to-end domestic ecosystem for rare earth magnets, India positions itself to secure high-demand supply chains, support its green energy transition, and strengthen its defense preparedness. The ₹7,280 crore commitment marks a decisive step toward reducing import dependence and propelling India into the league of advanced magnet-producing nations essential for the next phase of global technological competition.
(With agency inputs)
