India Approves ₹7,000 Crore Scheme for Rare Earth Magnet Manufacturing

Strengthening India’s Critical Mineral Security

India has approved a ₹7,000 crore incentive scheme to promote the domestic manufacturing of sintered rare earth permanent magnets , marking a decisive move to secure its critical mineral supply chains. The initiative is aimed at reducing import dependence, particularly on China, while supporting sectors crucial to national security, clean energy transition and advanced manufacturing.

India’s Rare Earth Resource Base

India holds substantial reserves of rare earth elements distributed across coastal and inland regions. These minerals are found in beach sands, red sands and inland alluvial deposits in states including Andhra Pradesh, Odisha, Tamil Nadu, Kerala, West Bengal, Jharkhand, Gujarat and Maharashtra . This geological endowment provides India with a strong foundation to develop an integrated rare earth value chain.

Scheme for Sintered Rare Earth Permanent Magnets

The newly approved Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM) seeks to establish the country’s first end-to-end domestic manufacturing ecosystem . The scheme targets a production capacity of 6,000 metric tonnes per annum , spanning the entire value chain—from processing rare earth oxides to producing finished high-performance permanent magnets. Rare earth oxides serve as critical inputs for downstream magnet and component manufacturing.

Strategic and Industrial Importance

Sintered rare earth permanent magnets are indispensable for electric vehicles, wind turbines, consumer electronics, aerospace platforms and defence systems . India currently imports most of these magnets, exposing key industries to supply disruptions. The scheme is expected to enhance supply chain resilience, support clean energy goals, create skilled employment and boost domestic industrial capability.

Global Partnerships and Long-Term Vision

Alongside domestic capacity building, the Ministry of Mines has signed cooperation agreements with Australia, Argentina and Zambia to secure overseas mineral assets. The initiative aligns with Atmanirbhar Bharat and the Viksit Bharat@2047 vision, positioning rare earth manufacturing as a strategic pillar of India’s future economic and technological sovereignty.

Important Facts for Exams

• Rare earths are vital for clean energy and advanced technologies

• India has both coastal and inland rare earth deposits

• Sintered rare earth magnets are critical for EVs and defence

• Reducing import dependence is a core mineral policy objective