Strengthening Self-reliance in Critical Sectors

Powering India’s Next Tech Leap, Rare Earth Permanent Magnet (REPM) ecosystem is rapidly evolving with a new ₹7,280-crore government scheme (approved late 2025) to build a fully integrated domestic value chain, aiming for 6,000 MTPA capacity from rare-earth oxides to finished magnets, crucial for EVs, wind energy, defence, and electronics, reducing import dependence and fostering self-reliance (Atmanirbhar Bharat), though upstream challenges with monazite processing and governance remain.

The Government has approved the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet’ with a financial outlay of ₹7,280 crore. The scheme aims to establish 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India, covering the full chain from rare-earth oxides to finished magnets.

By building a domestic integrated ecosystem, the initiative is intended to enhance self-reliance in a critical input for electric vehicles, renewable energy systems, electronics, aerospace and defence, and to position India as a key player in the global REPM market. It also supports broader national objectives, including Atmanirbhar Bharat, resilient supply chains for strategic sectors, and the country’s long-term Net Zero 2070 vision.

REPMs are amongst the strongest types of permanent magnets and are used extensively in technologies requiring compact and high-performance magnetic components. Their high magnetic strength and stability make them integral to:

• Electric vehicle motors

• Wind turbine generators

• Consumer and industrial electronics

• Aerospace and defence systems

• Precision sensors and actuators

The ability of REPMs to deliver strong magnetic performance at small sizes makes them essential for advanced engineering applications.

As India expands manufacturing across priority sectors such as clean energy, advanced mobility and defence, establishing a reliable domestic supply of high-performance magnets becomes increasingly important for long-term competitiveness and supply-chain resilience.

India has a substantial base of rare-earth minerals, particularly monazite deposits located across several coastal and inland regions. These deposits contain about 13.15 million tonnes of monazite, holding an estimated 7.23 million tonnes of rare-earth oxides (REO), and occur in coastal beach sands, teri/red sands and inland alluvium in Andhra Pradesh, Odisha, Tamil Nadu, Kerala, West Bengal, Jharkhand, Gujarat and Maharashtra.

These oxides serve as the primary raw material for downstream rare-earth industries, including permanent magnet manufacturing.

In addition, 1.29 million tonnes of in-situ REO resources have been identified in hard-rock areas of Gujarat and Rajasthan, while the Geological Survey of India has further augmented 482.6 million tonnes of rare-earth ore resources through extensive exploration initiatives.

Together, these assessments demonstrate the availability of substantial raw material resources to support downstream rare-earth–based industries, including REPM manufacturing.

While India has a strong rare-earth resource base, domestic production of permanent magnets is still developing, and imports continue to meet a large part of current requirements. Official trade data indicates that India sourced a major share of its permanent magnet imports from China during 2022–23 to 2024–25, with import dependence ranging between 59.6% and 81.3% value-wise and 84.8% and 90.4% quantity-wise.

Meanwhile, forward demand projections highlight the need for enhanced domestic capability. India’s REPM consumption is expected to double by 2030, driven by growth in electric mobility, renewable energy deployment, electronics manufacturing and strategic applications. Developing integrated REPM manufacturing capacity is therefore essential to support rising domestic requirements and strengthen supply-chain resilience.

Core Elements of the Scheme

The scheme establishes a comprehensive framework for end-to-end REPM manufacturing in India, supporting both initial capacity creation and long-term competitiveness.

• It aims to build a fully integrated production ecosystem for high-performance magnetic materials, creating 6,000 MTPA of domestic manufacturing capacity, from oxide feedstock to final product.

• The total capacity will be distributed among up to five beneficiaries through a global competitive bidding process, with each beneficiary eligible for up to 1,200 MTPA, ensuring diversification along with adequate scale.

• The scheme includes a strong incentive structure, with ₹6,450 crore earmarked as sales-linked incentives for REPM production over five years.

• A ₹750 crore capital subsidy will support the establishment of advanced, integrated REPM manufacturing facilities.

• The scheme will be implemented over seven years, comprising a two-year gestation period for setting up the integrated REPM facilities followed by five years of incentive disbursement linked to REPM sales. This structured timeline is intended to support timely capacity creation and provide stability during the initial production and market-development phase.

The establishment of domestic REPM manufacturing capacity supports several national priorities, as these magnets are essential for strategic and high-technology sectors that are central to India’s industrial and technological advancement. The Governments’ initiative aims to strengthen domestic production, enhance supply-chain resilience for rapidly expanding industries while also contributing to India’s long-term sustainability goals.

• Rare-earth magnets are widely used in energy-efficient motors, wind-power systems and other green technologies, and the initiative therefore aligns closely with the country’s broader clean-energy transition and its Net Zero 2070 vision.

• Promoting domestic manufacturing of REPMs is equally relevant for national security and self-reliance. As these magnets are used in defence and aerospace systems, developing integrated production capability within the country contributes to secure access for critical applications and supports ongoing indigenization efforts.

• This also complements India’s broader focus on strengthening its critical minerals value chain through the National Critical Minerals Mission (NCMM), which aims to improve availability and processing capabilities for key minerals, including rare-earth elements utilised across advanced sectors.

The Ministry of Mines has entered into bilateral agreements with mineral-rich countries including Australia, Argentina, Zambia, Peru, Zimbabwe, Mozambique, Malawi and Côte d’Ivoire. India also participates in multilateral platforms such as the Minerals Security Partnership (MSP), the Indo-Pacific Economic Framework (IPEF) and the initiative on Critical and Emerging Technologies (iCET), which collectively support efforts to build resilient critical minerals supply chains.

Complementing these efforts, Khanij Bidesh India Limited (KABIL) is engaged in overseas exploration and acquisition of strategic mineral assets, including lithium and cobalt, through partnerships in countries such as Argentina. These initiatives form a key component of India’s strategy to secure critical minerals required for electric mobility, renewable energy systems, electronics and defence applications.

Against this backdrop, the development of domestic REPM manufacturing capacity offers India a timely opportunity to strengthen its position in global value chains for advanced materials while supporting industrial growth at home.