Union Cabinet Gives Nod to ₹7,280-Crore Initiative for Rare Earth Magnet Manufacturing

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a Rs 7,280-crore incentive scheme to promote domestic manufacturing of rare earth permanent magnets (REPMs). The move is part of India’s broader strategy to reduce dependence on imported critical minerals and establish a robust supply chain in high-tech manufacturing sectors.

Objective of the Scheme

The scheme, officially titled the “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets”, aims to create an annual production capacity of 6,000 metric tonnes (MTPA) of REPMs. These magnets are vital components in industries such as electric vehicles, renewable energy, defence, medical devices, and consumer electronics.

Duration and Implementation

The programme will run for seven years, including a two-year gestation period for setting up integrated facilities and a five-year incentive disbursement phase. The incentives will be linked to actual sales of REPMs, encouraging both production efficiency and market competitiveness. The Ministry of Heavy Industries will oversee implementation in collaboration with other technical ministries.

Strategic Importance for India

India currently imports most of its rare earth materials, primarily from China. This scheme is expected to establish a domestic ecosystem for processing, sintering, and magnet manufacturing. It aligns with the government’s “Atmanirbhar Bharat” initiative and the Make in India mission, targeting sectors such as clean energy and electric mobility that rely heavily on rare earth materials.

Exam Oriented Facts

• Total outlay of the scheme: Rs 7,280 crore.
• Annual production target: 6,000 metric tonnes of REPMs.
• Scheme duration: 7 years (2-year setup + 5-year incentive period).
• Key industries impacted: EVs, defence, aerospace, and electronics.

Future Prospects and Industry Impact

The government expects the initiative to attract major private investments and foster R&D in magnet technology. Domestic REPM manufacturing will strengthen India’s industrial resilience, support its clean energy goals, and create high-skilled employment opportunities across technology-driven sectors.