New Delhi: The Government of India has approved a ₹7,280 crore scheme to establish a domestic Rare Earth Permanent Magnet manufacturing ecosystem, aimed at strengthening India’s self-reliance in a critical advanced material used across electric mobility, renewable energy, electronics, aerospace, and defence sectors.
The initiative targets the creation of 6,000 metric tonnes per annum (MTPA) of integrated Rare Earth Permanent Magnet manufacturing capacity, covering the entire value chain from rare-earth oxides to finished magnets.
The scheme, titled Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet, is designed to reduce import dependence, enhance supply-chain resilience, and support India’s long-term industrial growth while improving participation in global advanced materials value chains.
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Rare Earth Permanent Magnet Scheme: Key Objectives and Capacity Creation
The approved scheme aims to develop a fully integrated Rare Earth Permanent Magnet manufacturing ecosystem in India, ensuring end-to-end domestic production capability.
The total planned capacity of 6,000 MTPA will be distributed among up to five beneficiaries selected through a global competitive bidding process, with each eligible for a maximum capacity of 1,200 MTPA.
To support capacity creation and market development, the scheme includes a strong incentive structure. Of the total outlay, ₹6,450 crore has been earmarked as sales-linked incentives for Rare Earth Permanent Magnet production over a five-year period, while ₹750 crore has been allocated as capital subsidy for setting up advanced manufacturing facilities.
The scheme will be implemented over seven years, comprising a two-year gestation period for facility establishment followed by five years of incentive disbursement linked to sales, providing stability during the initial scale-up phase.
What is a Rare Earth Permanent Magnet and Why It Matters
A Rare Earth Permanent Magnet is among the strongest categories of permanent magnets and is widely used in applications that require compact, high-performance magnetic components.
These magnets are integral to electric vehicle motors, wind turbine generators, consumer and industrial electronics, aerospace and defence systems, and precision sensors and actuators.
Their ability to deliver high magnetic strength and stability at smaller sizes makes Rare Earth Permanent Magnet technology essential for advanced engineering and energy-efficient systems.
As India expands manufacturing in clean energy, advanced mobility, and strategic sectors, establishing a reliable domestic supply of high-performance magnets has become increasingly important.
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India’s Resource Base and the Need for Domestic Rare Earth Permanent Magnet Manufacturing
India possesses a substantial base of rare-earth mineral resources, particularly monazite deposits spread across coastal and inland regions.
These deposits contain an estimated 13.15 million tonnes of monazite, holding around 7.23 million tonnes of rare-earth oxides (REO), which serve as primary raw materials for downstream industries, including Rare Earth Permanent Magnet manufacturing.
Additional in-situ REO resources of 1.29 million tonnes have been identified in hard-rock areas of Gujarat and Rajasthan, while exploration efforts by the Geological Survey of India have augmented rare-earth ore resources to 482.6 million tonnes.
Despite this strong resource base, India currently relies heavily on imports for permanent magnets. Trade data indicates that during 2022–23 to 2024–25, import dependence ranged between 59.6% and 81.3% by value and 84.8% to 90.4% by quantity, primarily sourced from China.
With domestic Rare Earth Permanent Magnet demand projected to double by 2030, enhancing indigenous manufacturing capability has become critical.
Alignment with National Priorities and Policy Reforms
The establishment of domestic Rare Earth Permanent Magnet manufacturing capacity aligns closely with India’s broader national priorities, including Atmanirbhar Bharat, supply-chain resilience, clean-energy transition, and the Net Zero 2070 vision.
These magnets play a key role in energy-efficient motors, renewable power systems, and green technologies.
The initiative also supports national security objectives, as Rare Earth Permanent Magnet components are widely used in defence and aerospace systems. Strengthening domestic production capability contributes to secure access for strategic applications and supports ongoing indigenisation efforts.
The scheme complements the National Critical Minerals Mission (NCMM), approved in January 2025, which aims to strengthen India’s critical mineral value chains from exploration and mining to processing and recovery.
Policy reforms under the amended Mines and Minerals (Development and Regulation) Act, 1957, have further enabled private participation, mineral auctions, and a new exploration licence regime for critical and deep-seated minerals.
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Global Supply Chains and India’s Strategic Opportunity
Global supply chains for rare-earth materials and permanent magnets have faced disruptions in recent years, highlighting the importance of diversified and secure access.
India has undertaken multiple bilateral and multilateral initiatives to address this challenge, including agreements with mineral-rich countries and participation in platforms such as the Minerals Security Partnership, Indo-Pacific Economic Framework, and iCET.
Khanij Bidesh India Limited (KABIL), a joint venture under the Ministry of Mines, is actively engaged in overseas exploration and acquisition of strategic mineral assets to strengthen domestic value chains for clean energy and emerging technologies.
Against this backdrop, the development of domestic Rare Earth Permanent Magnet manufacturing capacity positions India to strengthen its role in global advanced materials supply chains while supporting domestic industrial growth.
The Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet is intended to enhance competitiveness, attract technology-driven investments, and support scalable industrial growth.
By building integrated domestic capability and strengthening downstream linkages, the initiative is expected to generate employment, deepen manufacturing capacity, and contribute to India’s long-term vision of Atmanirbhar Bharat and Viksit Bharat @2047.
