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Informist, Wednesday, Nov. 26, 2025

 

--Cabinet OKs rare earth permanent magnet mfg scheme worth INR 72.80 bln

 

NEW DELHI – The Union Cabinet, chaired by Prime Minister Narendra Modi, Wednesday approved INR 72.80 billion for Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets. Under this scheme, the government aims to set up integrated facilities to manufacture 6,000 tonne per annum of rare earth permanent magnets in India. It will help enhance self-reliance and position India as a key player in the global rare earth magnet market, Information and Broadcasting Minister Ashwini Vaishnaw said.

 

At present, India's demand for rare earth permanent magnets is met primarily through imports. "With this initiative, India will establish its first-ever integrated REPM (rare earth permanent magnet) manufacturing facilities, generating employment, strengthening self-reliance and advancing the nation's commitment to achieve Net Zero by 2070," the government said in a press release.

 

Rare earth magnets are becoming an important negotiating factor for countries carrying out trade dialogues, so it is important to have resilient supply chain, Vaishnaw said. Restrictions imposed by China in April on the exports of rare earth minerals caused severe shortage and adversely impacted the production of many automobile facilities around the world. Ever since, India has explored alternate markets to import the critical minerals to meet the current domestic demand of 4,000-5,000 tonne per annum. The current demand is met through imports from China, Japan, Vietnam, Australia, Canada, and the US, the information minister said.

 

The total outlay of INR 72.80 billion for the scheme comprises sales-linked incentives of INR 64.50 billion on rare earth permanent magnets sales for five years and capital subsidy of INR 7.50 billion for setting up an aggregate of 6,000 tonne per annum of rare earth permanent magnet manufacturing facilities. The scheme will support conversion of rare earth oxides to metals, metals to alloys, and alloys to finished permanent magnets.

 

The scheme envisions allocating the total capacity to five beneficiaries through a global competitive bidding process, with each beneficiary being allotted up to 1,200 tonne per annum of capacity. The total duration of the scheme will be seven years from the date of award, including a two-year gestation period for setting up an integrated rare earth permanent magnet manufacturing facility, and five years for incentive disbursement on the sale of rare earth permanent magnets.

 

Within three to four years, India will be self-reliant and can also export the extra production once the domestic demand is fulfilled, Vaishnaw said. The scheme will benefit upstream industries, he added.  End

 

Reported by Priyasmita Dutta

Edited by Ashish Shirke

 

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