As a significant decision to reduce import dependence, the government has cleared a ₹72.8 billion plan to build its first rare-earth magnet factories.
The Union Cabinet has approved a ₹72.8 billion scheme to build India’s first integrated units for sintered rare earth permanent magnets. The move is aimed at reducing import dependence, strengthening the supply chain for strategic industries, and positioning India as a competitive player in the global magnet market.
The decision was taken at a meeting chaired by Prime Minister Narendra Modi. The scheme seeks to create 6000 metric tonnes per annum (MTPA) of domestic capacity. It will cover the entire value chain, from rare-earth oxides to metals, alloys, and finished magnets.
The scheme includes sales-linked incentives worth ₹64.5 billion, which will be offered for five years. It also provides a capital subsidy of ₹7.5 billion for setting up the planned capacity. The government will select five beneficiaries through a global bidding process. Each manufacturer chosen will receive up to 1200 MTPA of capacity allocation.
The programme will run for seven years. This includes a two-year period for establishing facilities and a five-year period for disbursing incentives.
Essential for electric vehicles, renewable energy systems, aerospace, defence, industrial machinery, and a wide range of electronics, India currently imports most of its requirements.
Government projections show that domestic consumption will rise sharply by 2030. Demand is expected to double as electric mobility, clean energy, and consumer electronics expand. Officials said the new scheme aligns with India’s self-reliance and climate goals under the Net Zero 2070 pledge.
Officials described the initiative as a significant step towards building a secure and self-reliant magnet ecosystem. They said it would support advanced manufacturing, generate skilled employment, and contribute to the vision of a developed India by 2047.
