India has introduced a ₹7,280 crore national scheme aimed at building a robust domestic ecosystem for manufacturing rare earth permanent magnets (REPM)—vital components used across electric vehicles, wind turbines, defence systems, electronics, and advanced industrial applications. The Union Cabinet approved the initiative to significantly reduce the country’s dependence on imports and strengthen its clean-energy and high-technology supply chains.
A Major Push Toward Self-Reliance in High-Tech Manufacturing
Rare earth permanent magnets are critical for high-efficiency motors and generators, especially in EVs and renewable energy systems. Until now, India has relied heavily on magnets sourced from global markets, particularly China. This newly approved scheme seeks to change that by encouraging large-scale domestic production and creating an end-to-end value chain—from rareearth oxides to fully processed magnets.
Scheme Outlay and Structure
The ₹7,280 crore programme will be rolled out over seven years and includes:
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₹6,450 crore in sales-linked incentives for manufacturers over a five-year period.
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₹750 crore in capital subsidies to support building state-of-the-art magnet production units.
The government plans to develop five magnet manufacturing facilities, each with a capacity of up to 1,200 MTPA, targeting a combined annual output of 6,000 MTPA. The scheme includes an initial two-year setup phase, followed by a structured incentive cycle tied to production volumes and sales.
Strengthening Strategic and Green-Energy Sectors
By promoting localised production, India aims to secure key materials needed for its fast-growing EV market, wind-energy expansion, aerospace industry and defence applications. Experts expect the move to bolster technological independence, mitigate supply chain vulnerabilities, and entice global manufacturers to invest in India.
Industry Impact and Future Outlook
Industry experts view the scheme as a transformative step that can position India as a competitive magnet manufacturing hub over the next decade. As the demand for rare earth magnets surges globally, India’s investment could help capture a share of the global market while clean-mobility transition national goals like Atmanirbhar Bharat and the clean-mobility transition.
Leadership Comments
Thanking the Government for the initiative, Mr Vikrampati Singhania, President, ACMA, said,
“ACMA wholeheartedly welcomes the Cabinet’s approval of the REPM Manufacturing Scheme. This is a strategic and forward-looking intervention that addresses one of the most critical gaps in the EV and advanced mobility ecosystem. Rare earth permanent magnets are foundational to electric motors and high-efficiency systems, and the establishment of a domestic, integrated manufacturing base will significantly strengthen India’s technological competitiveness.”
Mr Vinod Aggarwal, MD & CEO, VE Commercial Vehicles said,
“VECV welcomes the Cabinet’s approval of the ₹7,280 crore Rare Earth Permanent Magnet (REPM) manufacturing scheme. Rare earth magnets are vital for electric drivetrains, power electronics, and high-efficiency systems that will increasingly support the commercial vehicle industry’s shift towards cleaner and more energy-efficient technologies. We appreciate the government’s vision of this forward-looking policy in creating an integrated domestic value chain, from rare earth oxides to metals, alloys, and finished magnets. By addressing a critical supply-side vulnerability in future mobility, this initiative will significantly strengthen India’s self-reliance in advanced materials. As the country moves towards its Net Zero 2070 target, the availability of locally manufactured REPMs will accelerate the adoption of next-generation electric and energy-efficient commercial vehicles. This forward-looking policy is a major boost to Make in India and will enhance the long-term competitiveness of the automotive and commercial vehicle ecosystem.”
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