The Indian government is set to ramp up its rare earth magnet manufacturing initiative, with plans to increase the scheme’s budget to over ₹50 billion from the earlier ₹13.5 billion and boost the annual production target from 1,500 metric tonnes (MT) to around 6,000 MT.
According to a report, the move aims to strengthen domestic manufacturing, attract more industry participation, and cut import dependence for critical sectors including electric vehicles (EVs), wind turbines, electronics, and defence systems. Rare earth permanent magnets are essential in these industries, and recent global supply chain disruptions have highlighted the importance of building local production capacity.
Officials said the revised plan will encourage broader participation, reducing the risk of project delays or failures. The scheme will now accommodate at least five manufacturers — up from the previous limit of two — with each eligible for incentives on up to 1,200 MT of annual production. This change follows recommendations from the Prime Minister’s Office to widen the scope of the initiative.
India’s current demand for rare earth magnets is estimated at about 4,000 MT annually and is expected to double by 2030. The upgraded target is intended to meet this projected growth while bolstering the industrial base.
The scheme, which will run for seven years, is open to both public and private entities capable of delivering end-to-end magnet production. Companies engaged in consultations include JSW Group, Mahindra Group, Kalyani Group, Sona Comstar, Midwest Advanced Materials, Entellus, and Proterial.
Despite having an estimated 6.9 million MT of rare earth reserves, India mined only 2,900 tonnes in 2024. In contrast, rare earth magnet imports surged to 53,000 tonnes in FY25. Currently, IREL (India) Ltd is the sole public sector firm involved in rare earth mining and refining.
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