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India launches a massive Rs 7,280-crore scheme to manufacture rare earth permanent magnets domestically, reducing dependence on China, securing EV, electronics, aerospace and green energy supply chains, and boosting strategic industrial growth.
Centre launches scheme to produce NdFeB magnets in India.
New Delhi: The Centre has officially notified a large-scale scheme to promote the domestic production of sintered rare earth permanent magnets, with an estimated outlay of Rs 7,280 crore. The move is aimed at reducing India’s dependence on China for critical magnet inputs while ensuring secure supply chains for electric vehicles, electronics, aerospace and green energy industries. The scheme, approved earlier by the Union Cabinet, intends to create a comprehensive domestic value chain to convert rare earth oxide into sintered NdFeB, considered the strongest type of permanent magnet, essential for strategic and industrial advancement.
Focus on Neodymium-Iron-Boron Magnets
Neodymium-Iron-Boron, or NdFeB, is the alloy used to produce high-performance permanent magnets that are key components in advanced technologies such as electric vehicles, wind turbines, robotics and aerospace applications. The scheme is designed to incentivize the setup of integrated manufacturing facilities with a total production capacity of 6,000 MTPA of sintered NdFeB REPMs. Facilities will convert NdPr oxide, sourced from rare earth oxides, into magnets, bridging a major gap in India’s industrial ecosystem.
Allocation and Incentives for Beneficiaries
Under the scheme, up to five applicants will be allocated integrated sintered NdFeB magnet manufacturing capacities through a transparent Global Tender Enquiry. The minimum allocation per beneficiary will be 600 MTPA, with a maximum of 1,200 MTPA in multiples of 100 MTPA. Eligible manufacturers will receive sales-linked incentives based on the volume of magnets sold and capital subsidies to set up the allocated capacity. Three selected beneficiaries with the lowest bids will additionally receive assured, limited supply of NdPr oxide from IREL (India) Limited, a CPSE under the Department of Atomic Energy.
Are Indian firms finally getting access to rare-earth magnets from China?
Seven-Year Scheme with Early Incentives
The total duration of the program will be seven years, including a two-year gestation period for establishing manufacturing facilities and five years for disbursing sales-linked incentives. If a facility begins selling NdFeB REPMs before the end of the gestation period, the initial sales will also qualify for incentive support, enhancing the overall attractiveness for investors.
Bridging the Industrial Gap in Rare Earth Magnets
India holds some of the world’s largest rare earth reserves, primarily along its coastal regions. While the country possesses upstream capabilities such as mining and refining rare earth oxides, there is a notable gap in midstream industrial capabilities for converting oxide to metal, metal to alloy, and alloy to finished magnets. Due to this gap, India currently imports all of its sintered NdFeB REPMs, leaving it dependent on external sources for critical industrial needs. The new scheme aims to establish these missing midstream capabilities, enabling India to become self-reliant in a sector critical for emerging technologies.
Strategic and Industrial Significance
The initiative is expected to bolster India’s strategic autonomy in high-tech industries, reduce foreign dependency, and strengthen domestic supply chains for sectors vital to economic growth and national security. By enabling local production of rare earth magnets, India will not only meet domestic demand but also potentially emerge as a competitive exporter in global markets, reinforcing its role in the global technology and clean energy supply chain.
