Centre may invite bids for rare earth magnet manufacturing scheme today

Although India possesses the world’s third-largest reserves of rare earth elements, currently, it relies heavily on imports to meet its needs.

• Ministry to invite REPM production applications on Friday
• Rs 7,280 crore plan aims for 6,000 MTPA domestic REPM capacity
• India to reduce imports after China restricted REPM exports

Did our AI summary help?

The Union Ministry of Heavy Industries is likely to invite applications on Friday under its initiative aimed at boosting production of sintered rare earth permanent magnets (REPM).

A senior official the Economic Times spoke to confirmed that the Request for Proposal (RFP) will be issued on March 20.

According to the official, the Rs 7,280 crore programme seeks to build domestic capacity of 6,000 MTPA, reinforcing supply networks for key industries such as automobiles, defence, and aerospace.

According to the report in the Economic Times, the plan proposes distributing total production capacity among five selected players through global competitive bidding, with each allotted up to 1,200 MTPA. The programme will span seven years, including a two-year setup phase followed by five years of incentive payouts tied to sales.

Although India possesses the world’s third-largest reserves of rare earth elements, currently, it relies heavily on imports to meet its needs. The push to tap on the country's rare earth elements gained urgency after China restricted REPM exports in April 2025, disrupting global supply chains.

In response, the Union Cabinet cleared a localisation plan in November 2025 to establish integrated manufacturing units covering the full process—from converting oxides into metals, then alloys, and finally finished magnets. The policy offers strong financial backing, including ₹6,450 crore in sales-linked incentives over five years and Rs 750 crore as capital support for setting up facilities.

Official data indicates that about 7.23 million tonnes of rare earth oxide (REO) equivalent are embedded in 13.15 million tonnes of monazite deposits found along coastal sands and inland regions across states such as Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra, Gujarat, Jharkhand, and West Bengal.

Additionally, around 1.29 million tonnes of REO exist in hard rock formations in Gujarat and Rajasthan.

Smaller quantities—roughly 2,000 tonnes of heavy mineral concentrates containing about 2% xenotime—have also been identified in riverbed deposits in Chhattisgarh and Jharkhand.