Big push to rare earth magnet manufacturing as Cabinet approves Rs 7,280 crore scheme
Rare earth magnets are used across major industries, including electric vehicles, aerospace, electronics, medical devices, and defence.
In a significant development related to the manufacturing of rare-earth permanent magnets, the Union Cabinet on Wednesday approved a Rs 7,280 crore scheme. The 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' was approved at a Cabinet meeting chaired by Prime Minister Narendra Modi. According to the information shared, this is a first-of-its-kind initiative by the Government of India to promote a rare earth permanent magnet (REPM) ecosystem, enhancing self-reliance and positioning India as a key player in the global REPM market.
Rare earth magnets are used across major industries, including electric vehicles, aerospace, electronics, medical devices, and defence.
"The scheme will promote manufacturing of rare earth permanent magnets. The aim is to create capacity of 6,000 MTPA (metric tonne per annum)," Information and Broadcasting Minister Ashwini Vaishnaw told reporters.
The scheme envisions allocating the total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allotted up to 1,200 MTPA of capacity.
The total duration of the scheme will be 7 years from the date of award, including a 2-year gestation period for setting up an integrated Rare Earth Permanent Magnets (REPM) manufacturing facility, and 5 years for incentive disbursement on the sale of REPM.
Financial outlay of the scheme
The total financial outlay of the scheme is Rs 7,280 crore, comprising sales-linked incentives of Rs 6,450 crore on REPM sales for five years and a capital subsidy of Rs 750 crore for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities.
At present, India's demand for REPMs is met primarily through imports. With this initiative, India will establish its first-ever integrated REPM manufacturing facilities, generating employment, strengthening self-reliance and advancing the nation's commitment to achieve Net Zero by 2070.