Cabinet Approves Landmark ₹7,280 Crore Scheme for Rare Earth Permanent Magnet Manufacturing

#RareEarthMagnets #NetZero2070 #MakeInIndia #AatmanirbharBharat #EVSupplyChain #DefenceManufacturing #ViksitBharat

December 2025 : The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has given its assent to a transformative 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)' with a substantial financial outlay of ₹7,280 crore.

This pioneering initiative is the first-of-its-kind by the Government of India aimed at establishing 6,000 Metric Tons per Annum (MTPA) of integrated REPM manufacturing capacity in India. This move is strategically designed to enhance the nation's self-reliance and establish India as a key player in the crucial global REPM market.

Rare Earth Permanent Magnets are critical components in next-generation technologies, being vital for sectors such as electric vehicles (EVs), renewable energy, electronics, aerospace, and defence applications. The scheme will support the creation of fully integrated manufacturing facilities, encompassing the entire supply chain from converting rare earth oxides to metals, alloys, and finally to finished REPMs.

The financial allocation of ₹7,280 crore includes a sales-linked incentive of ₹6,450 crore disbursed over five years on REPM sales, coupled with a capital subsidy of ₹750 crore for setting up the 6,000 MTPA manufacturing facilities. The total capacity will be allocated to five beneficiaries through a global competitive bidding process, with each allotted up to 1,200 MTPA.

Currently, India's rapidly growing demand for REPMs- expected to double by 2030 from 2025 levels- is primarily met through imports. By fostering indigenous capabilities, the scheme will not only secure the supply chain for key domestic industries but also generate significant employment. The government emphasizes that this initiative directly supports the Atmanirbhar Bharat Abhiyan and advances the nation’s commitment to achieving Net Zero by 2070.

The total duration of the scheme is set for seven years, including a two-year gestation period for setting up the facilities and five years for incentive disbursement. This landmark step underscores the Government's unwavering commitment to building a technologically self-reliant, globally competitive, and sustainable industrial base, in line with the vision of Viksit Bharat 2047.

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