Union Cabinet approves Rare Earth Permanent Magnet manufacturing scheme worth ₹7,280 crore

The Union Cabinet on Wednesday (November 26, 2025) approved the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets’ with a financial outlay of ₹7,280 crore. At present, India’s demand for REPMs is met primarily through imports. “This first-of-its-kind initiative aims to establish 6,000 Metric Tons per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing in India, thereby enhancing self-reliance and positioning India as a key player in the global REPM market,” a press release read.

“REPMs are one of the strongest types of permanent magnets and are vital for electric vehicles, renewable energy, electronics, aerospace, and defence applications. The Scheme will support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs,” it added.

The press release further said that with rapidly growing demand from electric vehicles, renewable energy, industrial applications, and consumer electronics, India’s consumption of REPMs is expected to double by 2030 from 2025.

“With this initiative, India will establish its first-ever integrated REPM manufacturing facilities, generating employment, strengthening self-reliance and advancing the nation’s commitment to achieve Net Zero by 2070.”

The total financial outlay of the scheme is ₹7,280 crore, comprising a sales-linked incentives of ₹6,450 crore on REPM sales for five years and capital subsidy of ₹750 crore for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities.

“The scheme envisions allocating the total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allotted up to 1,200 MTPA of capacity,” the press release read, and detailed that the total duration of the scheme will be seven years from the date of award. This will include a 2-year gestation period for setting up an integrated REPM manufacturing facility, and five years for incentive disbursement on the sale of REPM.