In a decisive push to reduce import dependence and anchor India firmly inside the next-generation manufacturing race, the Union Cabinet has approved a ₹7,280-crore scheme to promote domestic production of sintered Rare Earth Permanent Magnets (REPM) a material central to electric mobility, renewables, space technologies, and defence systems.
This is not just another industrial policy announcement. It signals India’s entry into a highly specialised global market long dominated by China, and one that underpins the world’s most critical clean-tech and strategic hardware.
Why This Move Matters
At the core of the scheme lies a strategic problem: India’s growing magnet demand is almost entirely import-driven. As EV penetration rises and wind energy targets accelerate, the consumption of REPMs is expected to double by 2030.
Yet India has remained only a raw-material source, not a value-added producer. The new scheme aims to change that by setting up 6,000 MTPA of integrated REPM manufacturing capacity — from oxides to metals, alloys, and final magnets.
This “ore-to-magnet” capability is what transforms a nation from a buyer into a global supplier.
A First-of-Its-Kind Industrial Shift
The approved scheme provides:
- ₹6,450 crore in sales-linked incentives
- ₹750 crore as capital subsidy
- Allocation to five global-scale beneficiaries, each with 1,200 MTPA capacity
This blend of targeted incentives places India into the league of nations that see rare earth magnet manufacturing as a national capability, not merely an industrial venture.
A Strategic Hedge Against Geopolitical Risk
Today, more than 85% of the world’s REPM supply comes from China. From smartphones and satellites to defence missiles, rare earth magnets are embedded inside systems critical to modern economies and militaries. Any disruption in this supply chain can paralyze multiple sectors at once.
By fostering a domestic ecosystem, India is signalling:
- It wants strategic autonomy in critical minerals
- It seeks a larger share in global advanced-material manufacturing
- It is willing to invest in long-gestation, deep-tech industrial capacity
This aligns with broader national objectives Atmanirbhar Bharat, Viksit Bharat @2047, and the Net-Zero 2070 pathway.
The Global Context: A Window of Opportunity
The timing is favourable:
- Western markets are diversifying supply chains
- Demand for EVs and renewable energy is scaling sharply
- India possesses the fifth-largest reserves of rare earths, yet remains under-explored
With this scheme, India is positioning itself not merely to meet domestic consumption, but to become a competitive exporter of advanced materials.
Execution Will Decide India’s Place in the Magnet Economy
While the vision is ambitious, the risks are equally real:
- Rare earth processing is capital-intensive and technologically intricate
- Environmental compliance must be non-negotiable
- Building metallurgical expertise takes time
- Global competition is stiff and innovation-led
But if executed well, India could gain a foothold in what many analysts call “the silicon chip of the clean-energy revolution.”
A Strategic Industrial Bet Worth Taking
The approved REPM scheme represents a bold and necessary step. It bridges industrial policy with national security, climate goals with economic aspiration, and resource potential with technological ambition.
For the first time, India is not just talking of clean-energy leadership it is building the materials backbone required for it.
This is more than an incentive package.
It is a strategic declaration that India intends to compete at the top of the value chain not at the margins of it.
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