The Union Cabinet on November 26 approved a Rs 7,280-crore Rare Earth Permanent Magnet (REPM) Manufacturing Scheme, aimed at building a domestic ecosystem for critical permanent magnets used across various sectors such as electric vehicles, defence and space applications. The outlay comprises a sales-linked incentives of Rs 6,450 crore on REPM sales for five years.
The scheme aims to reduce import dependence and enhance India's capabilities in high-technology applications.
"This first-of-its-kind initiative aims to establish 6,000 Metric Tons per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing in India, thereby enhancing self-reliance and positioning India as a key player in the global REPM market," said Ministry of Heavy Industries.
"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," the ministry added.
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.
The total duration of the scheme will be seven years from the date of award, including a two-year gestation period for setting up an integrated REPM manufacturing facility, and five years for incentive disbursement on the sale of REPM.
With this initiative, India will establish its first ever integrated REPM manufacturing facilities, generating employment, strengthening self-reliance and advancing the nation's commitment to achieve Net Zero by 2070, the ministry further said.
Shares of Gujarat Mineral Development Corporation (GMDC) rose sharply on November 26 amid optimism over the announcement of the scheme. The stock closed 9% higher.
Minister of Information and Broadcasting Ashwini Vaishnaw said that the core of the initiative is to create a full-value-chain manufacturing ecosystem, covering conversion of rare earth oxides to metals, metals to alloys, and alloys to finished permanent magnets. This segment is currently dominated by a few global suppliers.
Vaishnaw said the approval aligns with India’s geopolitical strategy around critical minerals. Rare earths represent one of the most tightly controlled mineral value chains globally, and India has been pursuing supply partnerships under its Critical Minerals Mission, he added.
The new scheme complements other government initiatives, including the India Semiconductor Mission, aimed at reducing foreign dependence on critical inputs.
The new REPM capacities will serve multiple demand segments including electric mobility, aerospace, electronics, renewable energy, robotics and strategic defence technologies, Vaishnaw said.
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