What's Happening?
The Indian government has announced a new scheme to enhance the production of sintered Rare Earth Permanent Magnets (REPM). This initiative aims to reduce India's reliance on imports and strengthen its
position in the global advanced materials market. The scheme will allocate INR 7,280 crore to establish a manufacturing capacity of 6,000 metric tonnes per year, covering the entire production chain from rare earth oxides to finished magnets. The initiative is part of India's broader strategy to achieve energy-transition goals and support the Atmanirbhar Bharat mission. The scheme will be implemented over seven years, with incentives linked to sales and capital subsidies.
Why It's Important?
This initiative is significant for India's industrial growth and energy transition efforts. By developing local capabilities in REPM production, India can reduce its dependence on imports, particularly from China, which currently supplies a significant portion of its magnets. The scheme is expected to create jobs, boost industrial strength, and contribute to India's Net Zero 2070 vision. Additionally, the initiative aligns with global efforts to secure critical mineral supply chains, as India engages in bilateral agreements with mineral-rich countries and participates in multilateral platforms like the Minerals Security Partnership.
What's Next?
The scheme's implementation will involve global competitive bidding to select five beneficiaries, each eligible for a substantial production capacity. Over the next five years, the government will disburse sales-linked incentives and capital subsidies. India's collaboration with countries like Australia and Zambia will be crucial in building a resilient supply chain for critical minerals. As the scheme progresses, it will be important to monitor its impact on India's industrial landscape and its ability to meet energy-transition goals.
