Cabinet Approves ₹7,280 Crore Scheme to Boost Rare Earth Magnet Manufacturing in India

The Union Cabinet has approved a ₹7,280 crore scheme aimed at promoting domestic manufacturing of sintered Rare Earth Permanent Magnets (REPM) to strengthen supply chains, reduce import dependence and enhance India's role in critical sectors. 

India Launches First-Ever REPM Manufacturing Scheme 

On November 26, 2025, the Cabinet chaired by Prime Minister Shri Narendra Modi approved a pioneering scheme to establish 6,000 Metric Tonnes Per Annum (MTPA) of integrated REPM manufacturing capacity in India.  

These powerful magnets are essential components in electric vehicles, renewable energy systems, aerospace, and defence applications. Currently, India's demand for REPMs is largely met through imports, but this scheme is intended to reverse that trend. 

Scheme Structure and Incentives 

The ₹7,280 crore scheme comprises ₹6,450 crore in sales-linked incentives and ₹750 crore in capital subsidies. Intended to run for 7 years, the scheme includes a 2-year gestation period for developing the manufacturing units and 5 years for disbursing incentives based on REPM sales.  

The government plans to select 5 beneficiaries through global competitive bidding, each with an allocation of up to 1,200 MTPA manufacturing capacity. 

Read More: Government Unveils ₹210 Crore Research Initiative for Critical Minerals! 

Strategic Impact on Self-Reliance and Net Zero Goals 

India’s consumption of REPMs is projected to double between 2025 and 2030, driven by rising demand in e-mobility, clean energy, and advanced industrial technologies. By incentivising local production, this scheme supports the Atmanirbhar Bharat initiative and aligns with India’s commitment to achieving Net Zero carbon emissions by 2070.  

The integrated facilities will cover the full value chain – from converting rare earth oxides to metals, alloys, and finally to finished magnets. 

Conclusion 

The scheme represents a significant move towards establishing a domestic base for the production of REPMs. It aims to meet growing industrial requirements while promoting sustainability and economic resilience. By reducing dependence on imports, India is strategising to become more self-reliant in critical technologies. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.