Government Approves ₹7,280-Crore Scheme to Boost Domestic Rare Earth Magnet Production

The Union government has cleared a ₹7,280-crore incentive scheme aimed at developing large-scale domestic manufacturing capacity for rare earth permanent magnets (REPMs), a critical component used in electric vehicle motors, consumer electronics, industrial machinery, and defence applications. The initiative is designed to reduce India’s reliance on imported magnets and strengthen the country’s advanced manufacturing supply chain.

Under the plan, the government will support the creation of integrated REPM production facilities with a cumulative annual capacity of nearly 6,000 metric tonnes. Projects will be selected through a competitive bidding process, with companies eligible for both capital subsidies and sales-linked incentives spread over a seven-year period.

Industry stakeholders have welcomed the scheme, noting that India currently depends heavily on imports for high-performance magnets essential to EVs, robotics, renewable-energy systems, and electronics. With global demand for REPMs rising sharply, companies believe that this initiative can help build a stable, domestic supply pipeline while improving cost competitiveness.

Experts say the policy could become a major enabler for sectors such as electric mobility, battery technology, defence systems, drones, and precision manufacturing, all of which require reliable magnet supply. Firms also expect the move to encourage technology partnerships, advanced processing units, and deeper investments across the magnet value chain, from raw material refining to finished components.

With this approval, India aims to position itself as a future-ready hub for critical materials manufacturing, strengthening both industrial capability and long-term strategic resilience.