What's Happening?
India has launched a scheme to promote the manufacturing of sintered Rare Earth Permanent Magnets (REPM) with the goal of enhancing its participation in global advanced-materials value chains and reducing import dependence. The initiative, announced by
the government, involves a financial outlay of Rs 7,280 crore and aims to establish a manufacturing capacity of 6,000 metric tonnes per annum. This capacity will cover the entire chain from rare-earth oxides to finished magnets. The scheme is designed to enhance competitiveness, attract technology-driven investment, and support long-term scalability, contributing to India's energy-transition goals and its Net Zero 2070 vision. The initiative will distribute domestic manufacturing capacity across five beneficiaries through global competitive bidding, with each eligible for up to 1,200 MTPA. It includes Rs 6,450 crore as sales-linked incentives over five years and a Rs 750 crore capital subsidy, to be implemented over seven years with a two-year gestation period followed by five years of incentive disbursement.
Why It's Important?
The scheme is significant as it aims to reduce India's reliance on imports, particularly from China, which has been a major source of permanent magnet imports. By establishing domestic capabilities, the initiative is expected to generate employment, deepen industrial capacity, and support the vision of Atmanirbhar Bharat, or self-reliant India. The development of a domestic REPM industry is crucial for sectors such as electric vehicle motors, wind turbine generators, consumer and industrial electronics, aerospace and defense systems, and precision sensors. This move is also part of India's broader strategy to build resilient critical minerals supply chains, as evidenced by its participation in multilateral platforms like the Minerals Security Partnership and the Indo-Pacific Economic Framework.
What's Next?
The scheme will be implemented over a seven-year period, with the first two years dedicated to establishing the necessary infrastructure and the following five years focused on incentive disbursement. The Ministry of Mines has already entered into bilateral agreements with mineral-rich countries such as Australia, Argentina, Zambia, Peru, Zimbabwe, and Mozambique to secure a stable supply of raw materials. As the scheme progresses, it is expected to attract further technology-driven investments and enhance India's competitiveness in the global market for advanced materials.
Beyond the Headlines
The initiative reflects a strategic shift towards reducing dependency on imports and fostering domestic innovation and manufacturing capabilities. It also highlights the importance of rare earth elements in the global transition to renewable energy and advanced technologies. By investing in this sector, India is positioning itself as a key player in the global supply chain for critical materials, which could have long-term implications for its economic and geopolitical standing.
