Copyright infringement not intended

Picture Courtesy: PIB

Context:

The Government has approved the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet’ with a financial outlay of ₹7,280 crore. The scheme aims to establish 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India, covering the full chain from rare-earth oxides to finished magnets.

What is 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:

• Electric vehicle motors
• Wind turbine generators
• Consumer and industrial electronics
• Aerospace and defence systems
• 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.

Current status and importance of the Scheme:

• India possesses a significant endowment of rare-earth minerals, with large monazite-bearing deposits distributed across coastal and inland regions. 

• Monazite reserves are estimated at about 13.15 million tonnes, containing nearly 23 million tonnes of rare-earth oxides (REO). (Source: PIB) 

• These deposits occur in beach sands, red/teri sands and inland alluvium across Andhra Pradesh, Odisha, Tamil Nadu, Kerala, West Bengal, Jharkhand, Gujarat and Maharashtra. 

• REOs obtained from these deposits form the key feedstock for rare-earth–based industries, including permanent magnet production. 

• Apart from beach sand deposits, about 29 million tonnes of in-situ REO resources have been mapped in hard-rock formations of Gujarat and Rajasthan. (Source: PIB) 

• Geological Survey of India has added around 6 million tonnes of rare-earth ore resources, indicating continued potential for resource expansion. (Source: PIB) 

• A large share of demand is currently met through imports, particularly from China.
• Between 2022–23 and 2024–25, China accounted for about 59.6%–81.3% of India’s import value and 8%–90.4% of import volume of permanent magnets, underscoring high external dependence. (Source: PIB) 

• Demand projections indicate that India’s REPM consumption may double by 2030, driven by electric vehicles, renewable energy systems, electronics manufacturing and defence applications. 

Core elements of the scheme:

• The scheme provides a complete end-to-end framework for REPM manufacturing in India, covering capacity creation, technology development, and long-term competitiveness. 

• Its objective is to establish a fully integrated value chain for high-performance rare-earth permanent magnets, targeting 6,000 MTPA of domestic production capacity from oxide stage to finished magnets. 

• This planned capacity will be shared among up to five selected companies through a global competitive bidding process, with each beneficiary eligible for up to 1,200 MTPA, ensuring both economies of scale and supplier diversification. 

• A sales-linked incentive pool of ₹6,450 crore has been allocated to encourage production and market development during the initial operating years.  

• In addition, a capital support of ₹750 crore is provided to help set up advanced, integrated REPM manufacturing facilities in the country. 

• The implementation period spans seven years, consisting of a two-year gestation phase for facility creation followed by five years of sales-linked incentive disbursement, allowing adequate time for installation, ramp-up, and stabilization of manufacturing operations.

Picture Courtesy: PIB 

Alignment with broader government initiatives:

• Establishing domestic REPM manufacturing directly supports strategic and high-technology sectors that are central to India’s industrial growth and technological leadership. 

• The initiative aims to boost domestic production, strengthen supply-chain resilience, and simultaneously support long-term sustainability objectives. 

• Rare-earth permanent magnets are used extensively in energy-efficient motors, wind turbines and clean-energy systems, aligning the scheme with India’s energy transition and Net-Zero 2070 commitments. 

• Domestic REPM manufacturing is also significant for national security and self-reliance, as these magnets are critical inputs for defence, aerospace and strategic platforms. 

• Developing an integrated manufacturing base supports indigenisation efforts and reduces reliance on external suppliers for sensitive applications. 

Role of Khanij Bidesh India Limited (KABIL):

• KABIL is a joint venture of NALCO, HCL and MECL under the Ministry of Mines. 

• It is tasked with identifying, exploring and acquiring overseas mineral assets, particularly lithium, cobalt and other strategic minerals. 

• KABIL’s projects—such as partnerships in Argentina—aim to secure supply for electric mobility, renewable power, defence and electronics industries, strengthening the Make in India

Picture Courtesy: PIB

Linkages with the National Critical Minerals Mission (NCMM):

• The initiative complements India’s broader strategy to develop critical mineral value chains, especially through the National Critical Minerals Mission (NCMM). 

• Critical minerals are essential raw materials for modern industries and emerging technologies, making secure access a strategic priority. 

• Approved in January 2025, the NCMM focuses on ensuring long-term, sustainable supply of critical minerals. 

• The mission covers the entire value chain—exploration, mining, beneficiation, processing, and recycling from end-of-life products. 

• In this context, strengthening REPM manufacturing becomes a core pillar of India’s push toward self-reliance in advanced materials and clean-energy technologies. 

Global Context:

• Recent disruptions in global rare-earth and permanent magnet supply chains underline the need for secure and diversified sources.
• India has therefore pursued bilateral partnerships with mineral-rich nations such as Australia, Argentina, Zambia, Peru, Zimbabwe, Mozambique, Malawi and Côte d’Ivoire.
• India also participates in key multilateral platforms, including the Minerals Security Partnership (MSP), Indo-Pacific Economic Framework (IPEF) and iCET, to support resilient supply chains. 

Conclusion:

Developing domestic REPM manufacturing will help India reduce import dependence, secure critical mineral supplies, support clean-energy and advanced mobility goals, and strengthen defence and strategic manufacturing, positioning the country more competitively in global value chains.

 Source: PIB