Indian Economy News

Cabinet Approves US$ 815 million Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)

The Union Cabinet has approved the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets with a financial outlay of Rs. 7,280 crore (US$ 815 million), aimed at establishing 6,000 Metric Tonnes Per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing capacity in India. The scheme seeks to reduce import dependence and strengthen domestic capabilities across the full value chain, covering conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs. These high-strength magnets are critical for electric vehicles, renewable energy systems, electronics, aerospace, and defence applications. With demand for REPMs expected to double by 2030 from 2025 levels, the initiative is positioned to enhance supply security, generate employment, and support industrial growth aligned with Net Zero commitments.

The scheme comprises sales-linked incentives of Rs. 6,450 crore (US$ 722 million) over five years and a capital subsidy of Rs. 750 crore (US$ 84 million) to support the creation of integrated facilities. Capacity will be allocated to five beneficiaries through a global competitive bidding process, with each entity eligible for up to 1,200 MTPA. The total duration is seven years, including a two-year gestation period for project setup, followed by five years of incentive disbursement. By fostering a robust ecosystem for REPM production, the initiative strengthens India’s position in global manufacturing while promoting technological self-reliance and long-term sustainability.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.