India Approves ₹7,280 Crore Push for Rare Earth Magnet Manufacturing

At a time when global supply chains are being reimagined, and nations are fiercely competing to secure control over the materials that power the technologies of the future, India has taken a defining step. On Wednesday, the Union Cabinet approved a ₹7,280 crore scheme aimed at building the country’s first-ever integrated manufacturing ecosystem for Rare Earth Permanent Magnets (REPM)—a move that places India firmly in the league of nations preparing for an era dominated by electric mobility, renewable energy, aerospace innovation, and defence modernization.

This is not just another industrial scheme. It is India’s entry into a domain that has long been dominated by a handful of countries, especially China, which controls over 90% of the global rare earth magnet supply. As India’s needs surge—fuelled by electric vehicles, wind energy projects, drones, semiconductors, satellites, and next-gen defence systems—the country has found itself heavily dependent on imports for one of the most strategic components of modern technology: high-performance permanent magnets.

The new scheme, announced under the leadership of Prime Minister Narendra Modi, aims to rewrite that story.

A Transformational Push Toward Technological Sovereignty

Rare Earth Permanent Magnets are among the strongest magnets known to industry. From the motor in an electric car, to the generator inside a wind turbine, to the control system of a missile—REPMs power some of the world’s most advanced applications.

Despite this enormous dependence, India’s domestic manufacturing capacity has remained negligible. Nearly the entire demand is fulfilled through imports. And the demand curve? It’s rising sharply—expected to double by 2030.

The Cabinet’s approval of the ₹7,280 crore scheme represents a bold and timely intervention.

For the first time, India will build an integrated REPM production ecosystem—covering the entire chain:

• Rare earth oxides → metals

• Metals → alloys

• Alloys → high-performance magnets

This end-to-end capability is what separates raw material suppliers from true global technology leaders. With this scheme, India is signalling the ambition to be counted among them.

Key Pillars of the Scheme

The government has laid out clear contours to ensure the initiative is globally competitive, investment-friendly, and strategically impactful:

- Total Outlay: ₹7,280 crore

- Sales-Linked Incentives: ₹6,450 crore over five years

- Capital Subsidy: ₹750 crore to build a 6,000 MTPA manufacturing base

- Implementation Period: 7 years

— 2 years of gestation
— 5 years of incentive disbursement

Beneficiaries: Up to 5 manufacturers, selected via global bidding

Each will receive approval for up to 1,200 MTPA capacity.

Union Minister Ashwini Vaishnaw called it a “first-of-its-kind” step that will reshape India’s industrial capabilities and boost global competitiveness.

A Boost for India’s Most Strategic Sectors

This scheme arrives at a critical moment for India's fast-growing sectors:

1. Electric Mobility

The EV revolution hinges on magnet-based motors. Domestic production ensures resilience for India’s booming EV ecosystem—from two-wheelers to buses to future solid-state battery vehicles.

2. Renewable Energy

As India pushes towards 500 GW of non-fossil energy capacity by 2030, wind turbines and grid technologies need reliable magnet supply. The scheme plays directly into this clean energy push.

3. Defence & Aerospace

Modern missiles, aircraft, satellites, radars, and naval propulsion rely on REPMs. Reducing import dependence in this domain is a strategic necessity, not just an economic one.

4. Electronics & Advanced Manufacturing

From sensors and precision instruments to robots and semiconductors—magnets are foundational components.

The Cabinet’s decision secures India’s footing in these high-value, high-tech sectors.

Reducing Vulnerability Amid Global Geopolitical Flux

Rare earths have become the new oil. With tense geopolitical dynamics, global supply chains often face unpredictable disruptions. India has experienced firsthand how dependence on external suppliers can bottleneck industrial growth.

This scheme addresses that vulnerability head-on by:

• Building domestic resilience

• Diversifying global supply chains

• Encouraging innovation in clean-tech materials

• Offering global manufacturers a credible alternative production base

With the world's appetite for rare earth magnets rising—especially from the EV and renewable sectors—India now positions itself as a future contributor, not merely a consumer.

Aligning With Net Zero 2070 & Viksit Bharat @2047

A notable highlight is how the initiative aligns with India’s broader national missions:

• Net Zero 2070 Commitment

REPMs are central to green energy technologies. Domestic production directly supports India’s climate commitments.

• Viksit Bharat @2047 Vision

By building capacity in critical materials and advanced manufacturing, India moves closer to its goal of becoming a global technology and industrial power by 2047—100 years of independence.

• Global Investments & Exports

An integrated REPM ecosystem is likely to attract global companies eager to diversify from existing supply chains. Over time, India can emerge as a manufacturing hub for rare earth magnets, supplying global markets.

A Long-Term Bet With Far-Reaching Impact

The approval of this ₹7,280 crore scheme is not just a policy decision—it is a strategic milestone that sets India on a new trajectory.

By nurturing a full-fledged, indigenous REPM manufacturing ecosystem, India strengthens:

• Its industrial backbone

• Its defence preparedness

• Its clean energy transition

• Its technology independence

• Its global manufacturing relevance

As the world transitions to electric, digital, and sustainable futures, the countries that command materials like REPMs will lead the next industrial era. With this bold step, India signals that it fully intends to be one of them.