The Indian government has approved a major plan to boost local production of magnets crucial for electric vehicles (EVs) and other industries. The “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets” has been allocated Rs 7,280 crore to develop domestic capacity and reduce reliance on imports.
The scheme aims to set up production for 6,000 Metric Tons per Year (MTPA) of integrated Rare Earth Permanent Magnets (REPMs). These magnets are among the strongest available and are essential for EV motors, renewable energy systems, electronics, aerospace, and defense equipment.
What makes this initiative significant is its focus on integrated manufacturing. Indian facilities will handle the full process, starting from converting rare earth oxides into metals, forming them into alloys, and producing finished magnets, all within the country. This will strengthen the entire domestic supply chain.
The EV market is driving this push. India’s demand for REPMs is expected to double by 2030 due to rapid growth in EVs and consumer electronics. Currently, most magnets are imported, making India dependent on international suppliers.
Financial plan and timeline:
- Total scheme duration: 7 years
- 2 years for setting up factories
- 5 years for incentive payments linked to sales
- 2 years for setting up factories
- Outlay: Rs 7,280 crore
- Rs 6,450 crore for sales-linked incentive
- Rs 750 crore for capital subsidy to establish facilities
- Rs 6,450 crore for sales-linked incentive
Five beneficiaries will be selected globally, each getting up to 1,200 MTPA capacity. This initiative is expected to create jobs, encourage advanced material manufacturing, and make India globally competitive.
Industry reaction:
Leaders from ACMA, SIAM, and Renault India welcomed the plan. They highlighted that domestic production of rare earth magnets will strengthen EV supply chains, reduce imports, promote clean energy, and enhance India’s technological competitiveness.
This scheme marks a big step in India’s Atmanirbhar Bharat vision, ensuring the country is better prepared for the global shift toward electric mobility and sustainable energy.
