India Calls Bids for INR 7,280 Cr Rare Earth Magnet Scheme

India has officially launched its rare earth magnet scheme, inviting bids on March 20 to set up domestic manufacturing units under a INR 7,280 crore incentive program.

The move marks a major step toward reducing the country’s reliance on imports and strengthening critical supply chains for fast-growing sectors like electric vehicles and renewable energy.

The government is targeting a production capacity of around 6,000 tonnes per year through this initiative. The scheme is designed to support companies that can build and operate facilities covering the entire value chain, from processing raw materials to producing finished magnets. These magnets are essential components used in EV motors, wind turbines, electronics, and defense applications.

• India currently imports 59.6 percent to 81.3 percent (by value) and 84.8 percent to 90.4 percent (by quantity) of its rare earth magnets, mostly from China
• India imported over 53,700 tonnes of rare earth magnets in FY2025, highlighting near-total import dependence
• Domestic demand is around 4,000–5,000 tonnes per year and is expected to double by 2030
• Government estimates show demand rising from about 4,010 tonnes to 8,220 tonnes by 2030

Under the plan, companies will receive financial support through a mix of capital subsidies and sales-linked incentives. A significant portion of the total outlay has been allocated to reward actual production, ensuring that manufacturers not only set up plants but also scale output efficiently. The scheme is expected to run for several years, with a setup period of about two years followed by incentive support tied to production performance.

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

The timing of the rare earth magnet scheme India is critical. India currently depends heavily on imports, particularly from China, which dominates the global supply of rare earth materials. Recent global supply disruptions and export restrictions have highlighted the risks of this dependency, especially as demand for EVs and clean energy technologies continues to rise.

Officials expect both domestic and international players to participate in the bidding process. Around five companies are likely to be selected to establish manufacturing units, each contributing to the overall production target. The government aims to create a competitive ecosystem that encourages innovation while ensuring long-term supply security.

Industry demand for rare earth magnets is projected to grow rapidly over the next decade, driven by the global shift toward electrification and decarbonization. India’s push to build local capacity aligns with its broader strategy to become a key player in advanced manufacturing and reduce exposure to external supply shocks.

The scheme also complements ongoing efforts to develop upstream capabilities, including exploration and processing of rare earth elements within the country. By linking raw material availability with manufacturing incentives, the government is trying to create a more integrated and resilient supply chain.

With bids now open, the focus shifts to how quickly companies respond and how effectively the selected players can execute their plans. The success of the scheme will depend not just on investment, but on timely implementation and the ability to compete with established global suppliers.

India’s latest move signals a clear intent to secure its position in a strategic industry that will shape the future of mobility, energy, and technology.

Key Data and Reports

• Total scheme outlay stands at INR 7,280 crore
• Target production capacity is around 6,000 tonnes per year
• Bids officially invited starting March 20
• Around five companies likely to be selected
• Estimated plant setup timeline is about two years
• Incentives to be provided for nearly five years based on production
• Major demand drivers include EVs, renewable energy, electronics, and defense
• India currently depends heavily on imports, mainly from China
• Global demand for rare earth magnets expected to rise significantly by 2030

Key statistics:

• EV and clean energy growth could push India’s demand to 8,000–10,000 tonnes annually by 2030
• India’s rare earth magnet consumption is expected to double by 2030, driven by EVs, renewables, and electronics
• The India rare earth magnet market is projected to grow from USD 2.34 billion in 2025 to USD 3.71 billion by 2032
• Globally, the rare earth elements market is expected to grow from USD 4.2 billion in 2025 to USD 6.3 billion by 2030
• China controls 85–90 percent of global rare earth magnet production, showing the scale of dependence
• India currently consumes magnets largely through imports, despite having one of the largest rare earth reserves globally