India Opens Global Bidding for Rare Earth Magnet Manufacturing Facilities
The Ministry of Heavy Industries has officially launched a global bidding process to establish integrated manufacturing units for sintered rare earth permanent magnets (REPM) in India. This initiative is part of a government scheme designed to enhance domestic production capabilities and reduce the country's dependence on imports.
Details of the Bidding Process and Incentives
According to an official statement, the Ministry issued a Request for Proposal (RFP) to select beneficiaries for setting up NdFeB-based REPM manufacturing plants with a total annual capacity of 6,000 metric tonnes. The scheme offers substantial financial incentives, including a capital subsidy of Rs 750 crore and sales-linked incentives worth Rs 6,450 crore. Each selected entity will be allocated a production capacity ranging from 600 to 1,200 metric tonnes per annum.
The bidding will be conducted online through a transparent Least Cost System (LCS), which involves two stages: Technical Bid and Financial Bid, via the Central Public Procurement (CPP) Portal. Tender documents are available from March 20, 2026, with the bid submission deadline set for May 28, 2026. Technical bids will be opened on May 29, 2026.
Strategic Importance and Market Context
Rare earth permanent magnets are critical components used in key sectors such as electric vehicles, wind energy, electronics, aerospace, and defence. This initiative aims to establish a complete domestic value chain, from raw materials like NdPr oxide to finished magnets, thereby strengthening India's self-reliance.
The scheme also includes provisions for an assured supply of NdPr oxide through IREL (India) Ltd. for select bidders, ensuring raw material security for domestic manufacturers. This move comes in response to India's heavy reliance on imports, particularly from China, which dominates the global rare earth market.
Impact of Global Supply Chain Disruptions
As per data from the Ministry of Mines, India sourced over 80% of its 540 tonnes of magnet imports from China in the last fiscal year. Recent Chinese export curbs, including restrictions on seven rare earth elements and finished magnets imposed in April 2025, have significantly tightened global supply chains. A report by Crisil highlighted that these measures have delayed approvals by at least 45 days, creating a backlog and slowing clearances.
In response to these challenges, the Indian government has also launched the National Critical Mineral Mission to diversify sources and mitigate risks associated with import dependencies. This global bidding process represents a strategic step towards building a resilient and self-sufficient manufacturing ecosystem for rare earth magnets in India.
