Fuelled by rising EV and defence demand, India eyes to boost rare earth magnet scheme to ₹50 billion, targeting 6000 metric tonnes output to cut import dependence.
The Indian government plans to significantly boost its rare earth magnet manufacturing scheme, increasing the budget to over ₹50 billion from the earlier ₹13.5 billion. The annual production target will also rise sharply, from 1500 metric tonnes (MT) to about 6000 MT.
According to a report by Financial Express, the move seeks to strengthen domestic manufacturing, attract more industry players, and reduce reliance on imports for electric vehicles (EVs), wind turbines, electronics, and defence systems.
Rare earth permanent magnets are a critical component in these sectors, and global supply chain disruptions have underscored the need for local production capacity.
Officials said the revised plan will encourage broader participation and reduce the risk of project delays or failures. Instead of limiting incentives to just two companies, the scheme will now accommodate at least five manufacturers, each eligible for incentives on up to 1200 MT of annual production. This change follows recommendations from the Prime Minister’s Office to widen the scheme’s scope.
Industry estimates put India’s current rare earth magnet demand at around 4000 MT annually, with a potential to double by 2030. The upgraded production target is designed to meet this anticipated growth while creating a stronger industrial base.
The scheme will run for seven years and remain open to public and private sector entities capable of delivering end-to-end magnet production. Among those engaged in consultations are JSW Group, Mahindra Group, Kalyani Group, Sona Comstar, Midwest Advanced Materials, Entellus, and Proterial.
India holds an estimated 6.9 million MT of rare earth reserves, but mined only 2,900 tonnes in 2024. In contrast, imports of rare earth magnets surged to 53,000 tonnes in FY25. Currently, IREL (India) Ltd is the sole public sector firm involved in rare earth mining and refining.
Read more: Indian Electronics Manufacturers Face Rare Earth Materials Disruption
