The Union Cabinet, chaired by Prime Minister Narendra Modi, today approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' with a budget of ₹7280 crore. This pioneering initiative aims to establish 6,000 Metric Tons per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing in India, thereby boosting self-reliance and establishing India as a major player in the global REPM market.

According to the PIB press release, "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."

Driven by the surging demand from electric vehicles, renewable energy, industrial uses, and consumer electronics, India's use of REPMs is projected to double between 2025 and 2030. Currently, most of India's REPM demand is fulfilled through imports. This initiative will lead to the creation of India's first integrated REPM manufacturing plants, boosting employment, enhancing self-sufficiency, and supporting the country's goal of reaching Net Zero by 2070.

The total financial outlay of the scheme is ₹7280 crore, comprising sales-linked incentives of ₹6450 crore on REPM sales for five (5) years and a capital subsidy of ₹750 crore for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities, per the press release.

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, per the press release.

The total duration of the scheme will be 7 years from the award date, including a 2-year gestation period for establishing an integrated REPM manufacturing facility, and 5 years for incentive disbursement based on REPM sales.

This initiative by the Government of India is a landmark step towards strengthening the domestic REPM manufacturing ecosystem and enhancing competitiveness in the global markets. By fostering indigenous capabilities in REPM production, the scheme will not only secure the REPM supply chain for domestic industries but also support the nation’s Net Zero 2070 commitment. It embodies the Government's unwavering commitment to build a technologically self-reliant, globally competitive, and sustainable industrial base, in line with the vision of Viksit Bharat @2047, per the press release.