A major boost to the production of rare earth magnets as the Cabinet approves a Rs 7,280 crore scheme

In a significant development related to the manufacturing of rare-earth permanent magnets, the Union Cabinet on Wednesday approved a Rs 7,280 crore scheme. The 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' was approved at a Cabinet meeting chaired by Prime Minister Narendra Modi. According to the information shared, this is a first-of-its-kind initiative by the Government of India to promote a rare earth permanent magnet (REPM) ecosystem, enhancing self-reliance and positioning India as a key player in the global REPM market.

Rare earth magnets are used across major industries, including electric vehicles, aerospace, electronics, medical devices, and defence.

"The scheme will promote manufacturing of rare earth permanent magnets. Information and Broadcasting Minister Ashwini Vaishnaw told reporters that the goal is to build capacity of 6,000 MTPA (metric tonnes per annum).

The plan calls for a worldwide competitive bidding process to distribute the entire capacity to five beneficiaries. Each beneficiary will be allotted up to 1,200 MTPA of capacity.

The total duration of the scheme will be 7 years from the date of award, including a 2-year gestation period for setting up an integrated Rare Earth Permanent Magnets (REPM) manufacturing facility, and 5 years for incentive disbursement on the sale of REPM.

The total financial outlay of the scheme is Rs 7,280 crore, comprising sales-linked incentives of Rs 6,450 crore on REPM sales for five years and a capital subsidy of Rs 750 crore for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities.

Currently, imports are the main source of REPMs needed in India. With this project, India will build its first integrated REPM manufacturing facilities, creating jobs, boosting independence, and advancing the country's goal of reaching Net Zero by 2070.