Cabinet Approves Rs.7280 Cr Push for Rare Earth Magnet Manufacturing

The Union Cabinet today approved a bold move to boost rare earth permanent magnet (REPM) manufacturing in India, marking a major shift in the country’s industrial strategy.

With an outlay of Rs.7280 crore, the scheme aims to build 6,000 MTPA of integrated REPM capacity—India’s first such setup.

REPMs are among the strongest magnets used worldwide, powering electric vehicles, wind turbines, electronics, aerospace systems, and defense technologies. Until now, India relied heavily on imports. This approval sets the stage for a domestic ecosystem where rare earth oxides will be turned into metals, then alloys, and finally into finished REPMs.

Also Read: What the Rare Earth Crisis Means for the EV and Electronics Industry

Demand for rare earth permanent magnets in India is rising fast, expected to double by 2030 as EVs, renewable energy, and high-tech manufacturing scale up. The scheme positions Indian industry to meet this surge while strengthening the nation’s strategic supply chain.

Of the total outlay, Rs.6450 crore has been reserved as sales-linked incentives over five years, while Rs.750 crore will support capital investment. Capacity will be distributed among five beneficiaries, each receiving up to 1,200 MTPA through global competitive bidding.

The scheme will run for seven years, including a two-year setup period and five years of incentive disbursement. Once operational, these facilities are expected to create jobs, boost self-reliance, and support India’s journey toward Net Zero by 2070.

This decision marks a crucial step toward building a competitive, technology-driven industrial base aligned with the vision of Viksit Bharat @2047, giving India a stronger foothold in the global REPM market.