India has taken a major step toward reducing its dependence on imported critical technologies by approving a new national programme for manufacturing sintered rare earth permanent magnets. These magnets are essential components used in electric vehicle motors, renewable energy systems, advanced electronics and defence platforms. The Union Cabinet cleared a financial package of Rs 7,280 crore to establish a fully integrated domestic supply chain capable of producing 6,000 metric tonnes per year of rare earth magnets. This marks India’s first large-scale initiative to build capability across the entire value chain, from processing rare earth oxides to producing finished, high-performance magnets.
India meets nearly its entire rare earth magnet requirement through imports, with a large share linked to global supply chains influenced by China. As the demand for magnets is expected to double by 2030, the government’s new scheme aims to secure stable supplies while strengthening India’s technological independence. According to experts, including EY India’s Energy Tax Leader Raju Kumar, the initiative aligns with the National Critical Minerals Mission and signals a long-term commitment to building a competitive minerals ecosystem. He noted that the sector could unlock new opportunities in mining, processing, alloying and advanced material manufacturing, supporting high-value industries like electric mobility, defence and renewable energy.
Of the total outlay, Rs 6,450 crore will be offered as sales-linked incentives across five years, while Rs 750 crore will be provided as capital subsidies to manufacturers. The government plans to select up to five companies through a global bidding process, each eligible to set up 1,200 MTPA capacity. The programme will run for seven years, including the two-year period required for plant setup. Rare earth permanent magnets are regarded as some of the strongest magnets globally, powering equipment like EV motors, wind turbines, drones, satellites and medical systems. Building domestic capability is expected to enhance India’s clean energy transition, strengthen supply chains, reduce import dependence and support the vision of Viksit Bharat by 2047. The government anticipates that this landmark initiative will generate employment, attract investment and position India as a competitive player in the global rare earth magnet market.
