Government to Unveil ₹7,350 Crore Rare Earth Magnet Scheme to Boost Production

In a major step towards self-reliance in critical technology components, the Indian government is preparing to launch a ₹7,350 crore scheme aimed at establishing a domestic ecosystem for sintered rare earth permanent magnets (REPMs), as per the news reports. 

The move follows China’s export restrictions earlier this year, which exposed India’s vulnerability in sourcing key materials vital for its automotive, electronics, renewable energy, and defence industries.

Building India’s Rare Earth Magnet Ecosystem

The proposed scheme, expected to be named the Scheme to Promote Sintered Rare Earth Permanent Magnet Manufacturing in India, is designed to create a fully indigenous production chain with an annual capacity of 6,000 tonnes. 

Over 7 years, the initiative will support the development of advanced manufacturing units capable of converting neodymium-praseodymium (NdPr) oxide into sintered neodymium-iron-boron (NdFeB) magnets, the essential component powering electric motors, wind turbines, and electronic devices.

Under this scheme, 5 integrated facilities, each with a capacity of up to 1,200 tonnes per annum, will receive government support. Companies can bid for capacities between 600 and 1,200 tonnes in increments of 100 tonnes. 

Bidding, Incentives, and Raw Material Sourcing

The Ministry of Heavy Industries (MHI) will oversee the selection process through a Global Tender Enquiry. A transparent two-stage system, comprising technical and financial evaluations, will be used to identify five qualified beneficiaries. 

The maximum incentive allowed per kilogram of sintered NdFeB magnets will be capped at ₹2,150, based on an average selling price of ₹5,000 and a 43% cost disadvantage compared to global markets.

Implementation and Oversight

The implementation will be supervised by an inter-ministerial committee led by the MHI Secretary to ensure timely execution and effective monitoring. The scheme will function independently of existing incentive programmes such as the Production Linked Incentive (PLI) for advanced automotive components, where no applications were received for rare earth magnets.

Read More: e-NAM Platform Expanded: 9 New Commodities Added To Boost India’s largest Digital Agri-Trade Platform!

Conclusion

By investing in rare earth magnet manufacturing, India is taking a decisive step towards building strategic self-reliance in advanced materials, a foundation for its clean energy and technology ambitions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.