In a significant move to strengthen India's domestic manufacturing capabilities, the Union Cabinet led by Prime Minister Narendra Modi has approved a comprehensive ₹7,280 crore scheme for establishing Rare Earth Permanent Magnets (REPM) production facilities across the country.
Strategic Boost for Domestic Manufacturing
The newly approved Rare Earth Permanent Magnets Scheme represents a major step toward reducing India's dependence on imports, particularly from China, for these critical components. The initiative aims to establish integrated manufacturing facilities with a total capacity of 6,000 Metric Tons per Annum (MTPA) of Rare Earth Permanent Magnets.
Union Minister Ashwini Vaishnaw emphasized the strategic importance of this first-of-its-kind initiative during the announcement on Wednesday. The scheme is designed to create a complete value chain within India, from raw materials to finished products, marking a pivotal moment in the country's industrial development.
Comprehensive Financial Support and Implementation
The financial structure of the scheme includes ₹6,450 crore allocated as sales-linked incentives for REPM sales over five years, complemented by ₹750 crore capital subsidy for establishing production facilities. The implementation timeline spans seven years from the award date, incorporating a two-year establishment period for integrated REPM manufacturing facilities.
The manufacturing units will be developed as five separate facilities, each with 1,200 MTPA capacity, ensuring distributed production capabilities across the country. The integrated approach will oversee the entire manufacturing process:
- Conversion of rare earth oxides to metals
- Transformation of metals into alloys
- Production of finished Rare Earth Permanent Magnets
Driving Multiple Sectors and Employment
Rare Earth Permanent Magnets are among the most powerful permanent magnets available and serve as essential components in various growing sectors. The scheme is expected to significantly impact:
- Electric vehicles manufacturing
- Renewable energy infrastructure
- Electronics and consumer goods
- Aerospace and defence industries
India anticipates a twofold increase in REPM consumption by 2030 compared to 2025 levels, driven primarily by rising demand from electric vehicles, renewable energy projects, industrial sectors, and consumer electronics. This growth projection underscores the timing and importance of the domestic manufacturing initiative.
Supporting National Goals and Global Competitiveness
The scheme aligns with multiple national objectives, including enhancing self-sufficiency, creating employment opportunities, and supporting India's Net Zero target by 2070. By developing local REPM production expertise, India aims to establish secure supply chains for national industries while strengthening its position in the global market.
This strategic move represents part of India's comprehensive approach to establishing secure supply chains for essential minerals while developing domestic technological capabilities in emerging industrial domains. The initiative positions India to compete effectively in the global rare earth magnets market while reducing vulnerability to international supply chain disruptions.
