With an aim of enhancing self-reliance and positioning India as a key player in the global Rare Earth Permanent Magnet (REPM) market, the Union Cabinet has approved 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' with an outlay of Rs 7,280 crore. The scheme is aimed at creating capacity of 6,000 MTPA (metric tonne per annum) of integrated REPM manufacturing in India. The scheme will support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs.

The scheme comprised of a sales-linked incentives of Rs 6450 crore on REPM sales for five years and capital subsidy of Rs 750 crore for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities. The scheme envisions allocating the total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allotted up to 1,200 MTPA of capacity.  The total duration of the scheme will be 7 years from the date of award, including a 2-year gestation period for setting up an integrated REPM manufacturing facility, and 5 years for incentive disbursement on the sale of REPM.

REPMs are one of the strongest types of permanent magnets and are vital for electric vehicles, renewable energy, electronics, aerospace, and defence applications. Driven by the rapidly growing demand from electric vehicles, renewable energy, industrial applications, and consumer electronics, India's consumption of REPMs is expected to double by 2030 from 2025. Currently, the country's demand for REPMs is met primarily through imports. With this initiative, India will establish its first ever integrated REPM manufacturing facilities, generating employment, strengthening self-reliance and advancing the nation's commitment to achieve Net Zero by 2070.