The need to boost REPM manufacturing ecosystem

• In November, the Union Cabinet approved the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets’ with a financial outlay of Rs 7,280 crore.

• It aims to establish 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in the country.

Rare Earth Permanent Magnet (REPM)

• REPMs are amongst the strongest types of permanent magnets and are used extensively in technologies requiring compact and high-performance magnetic components. 

Their high magnetic strength and stability make them integral to:

i) Electric vehicle motors.

ii) Wind turbine generators.

iii) Consumer and industrial electronics.

iv) Aerospace and defence systems.

v) Precision sensors and actuators.

• The ability of REPMs to deliver strong magnetic performance at small sizes makes them essential for advanced engineering applications. 

• As India expands manufacturing across priority sectors such as clean energy, advanced mobility and defence, establishing a reliable domestic supply of high-performance magnets becomes increasingly important for long-term competitiveness and supply-chain resilience.

India’s current landscape and need for the scheme

• India has a substantial base of rare-earth minerals, particularly monazite deposits located across several coastal and inland regions. 

• These deposits contain about 13.15 million tonnes of monazite, holding an estimated 7.23 million tonnes of rare-earth oxides (REO), and occur in coastal beach sands, teri/red sands and inland alluvium in Andhra Pradesh, Odisha, Tamil Nadu, Kerala, West Bengal, Jharkhand, Gujarat and Maharashtra. 

• These oxides serve as the primary raw material for downstream rare-earth industries, including permanent magnet manufacturing.

• In addition, 1.29 million tonnes of in-situ REO resources have been identified in hard-rock areas of Gujarat and Rajasthan, while the Geological Survey of India has further augmented 482.6 million tonnes of rare-earth ore resources through extensive exploration initiatives. 

• Together, these assessments demonstrate the availability of substantial raw material resources to support downstream rare-earth–based industries, including REPM manufacturing.

• While India has a strong rare-earth resource base, domestic production of permanent magnets is still developing, and imports continue to meet a large part of current requirements. 

• Official trade data indicates that India sourced a major share of its permanent magnet imports from China during 2022-23 to 2024-25.

• India’s REPM consumption is expected to double by 2030, driven by growth in electric mobility, renewable energy deployment, electronics manufacturing and strategic applications. 

How will the scheme be implemented?

• The scheme establishes a comprehensive framework for end-to-end REPM manufacturing in India, supporting both initial capacity creation and long-term competitiveness.

• It aims to build a fully integrated production ecosystem for high-performance magnetic materials, creating 6,000 MTPA of domestic manufacturing capacity, from oxide feedstock to final product.

• The total capacity will be distributed among up to five beneficiaries through a global competitive bidding process, with each beneficiary eligible for up to 1,200 MTPA.

• The scheme includes a strong incentive structure, with Rs 6,450 crore earmarked as sales-linked incentives for REPM production over five years.

• A Rs 750 crore capital subsidy will support the establishment of advanced, integrated REPM manufacturing facilities.

• The scheme will be implemented over seven years, comprising a two-year gestation period for setting up the integrated REPM facilities followed by five years of incentive disbursement linked to REPM sales. 

• This structured timeline is intended to support timely capacity creation and provide stability during the initial production and market-development phase.

Expected outcomes

• The establishment of domestic REPM manufacturing capacity supports several national priorities, as these magnets are essential for strategic and high-technology sectors that are central to India’s industrial and technological advancement. 

• Rare-earth magnets are widely used in energy-efficient motors, wind-power systems and other green technologies. The initiative therefore aligns closely with the country’s broader clean-energy transition and its Net Zero 2070 vision.

• By building a domestic integrated ecosystem, the initiative is intended to enhance self-reliance in a critical input for electric vehicles, renewable energy systems, electronics, aerospace and defence, and to position India as a key player in the global REPM market.

• It will also facilitate employment generation and strengthening of domestic value chains.

(The author is a trainer for Civil Services aspirants.)