What is the scheme — key structural details??
The scheme is officially named “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)”.
Financial outlay: ₹7,280 crore. This includes: a capital subsidy of ₹750 crore for setting up manufacturing facilities, plus sales-linked incentives of ₹6,450 crore over five years for REPM sales.
Target capacity: 6,000 metric tonnes per annum (MTPA) of “sintered REPM” — i.e. fully processed, finished permanent magnets.
Allocation method: Capacity will be awarded to up to five “beneficiaries” through a global competitive bidding process. Each beneficiary can get up to 1,200 MTPA capacity. Minimum bid size is 600 MTPA, in increments of 100.
Timeline: The scheme runs for 7 years — of which the first 2 years are a gestation period for setting up integrated manufacturing facilities (rare earth oxide → metal → alloy → finished magnet), and the remaining 5 years are for disbursing incentives correlated to sales of REPM.
In short: the government isn’t just offering a one-time subsidy — the plan aims to build a full manufacturing value chain domestically, from raw materials to finished magnets, and to make it commercially sustainable via incentives and support.
What exactly will be produced — the technology and supply-chain??
The magnets targeted are sintered rare-earth permanent magnets (REPM) — among the strongest permanent magnets available.
The process involves multiple stages: conversion of rare-earth oxides (e.g. Neodymium-Praseodymium oxide / “NdPr oxide”) into metals → alloys → finished magnets.
Currently, India’s demand for REPM is mostly met via imports; domestic manufacturing of finished magnets is negligible or absent.
By building integrated facilities domestically — which can handle all stages from oxide processing to final magnet production — the scheme aims to break India’s dependence on imported magnets and on foreign supply chains.
Why the government says this is critical — sectors & strategic rationale??
The approval isn’t just about manufacturing magnets: it’s a strategic move aligned with many of India’s future-oriented goals. Key motivations:
Electrification, clean energy & net-zero goals: REPMs are essential for electric vehicle (EV) motors, wind-turbine generators, renewable-energy systems, etc. Building domestic magnet capacity supports India’s clean energy transition and its long-term goal of achieving net-zero emissions by 2070.
Self-reliance in strategic supply chains: For high-tech sectors — including aerospace, defence, electronics, medical devices, renewable energy — magnets are a critical component. Domestic production reduces vulnerability arising from import dependence, especially given global geopolitics.
“Make in India” industrial push: By building value-chain capabilities in rare-earth metallurgy and magnet manufacturing, India strengthens its industrial base, potentially creating new manufacturing clusters, jobs, and investments.
Global competitiveness and export potential: Once domestic capacity is established, India may not only meet its internal demand but also emerge as a global supplier of REPMs — offering an alternative to existing dominant suppliers.
