India's Union Cabinet has approved a ₹7,280 crore scheme to promote the manufacturing of sintered rare earth permanent magnets (REPM), marking the first integrated domestic ecosystem for these critical components.​

The initiative targets a production capacity of 6,000 metric tons per annum (MTPA), allocated to five beneficiaries through global competitive bidding, with each eligible for up to 1,200 MTPA.​

REPMs, particularly high-performance NdFeB types derived from neodymium-praseodymium (NdPr) oxides, power electric vehicles, wind turbines, defence systems, consumer electronics, and medical equipment, with demand projected to double by 2030.​

China controls over 90% of global refined REPM production and 70% of mining output, wielding this dominance for geopolitical leverage amid tightening export controls that disrupt Indian supply chains.​

The scheme counters this near-monopoly by funding the full value chain—from rare earth oxides to metals, alloys, and finished magnets—reducing India's total import dependence.​

Financial support includes ₹6,450 crore in sales-linked incentives over five years and ₹750 crore as capital subsidies, spanning a seven-year timeline with a two-year gestation period.​

India possesses the world's fifth-largest rare earth reserves at 6.9 million tonnes of rare earth oxide equivalent, mainly in southern states like Kerala, Odisha, Andhra Pradesh, and Tamil Nadu, locked in monazite sands rich in elements such as neodymium and thorium.​

Extraction challenges persist due to radioactivity from thorium and uranium, necessitating Atomic Energy Regulatory Board oversight, plus complex solvent extraction generating vast toxic waste—up to 100 tonnes per ton of oxide.​

A mid-sized electric vehicle requires 1-2 kg of NdFeB magnets, while a 3 MW offshore wind turbine needs 600 kg, underscoring exponential demand as India eyes 30% EV penetration by 2030 and renewable expansion.​

Oversight falls to the Department of Atomic Energy, Ministry of Mines, and NITI Aayog, aligning with Atmanirbhar Bharat, job creation, and Net Zero by 2070 goals.​

How Will The Scheme Affect India's EV And Wind Supply Chains

The ₹7,280-crore rare earth permanent magnet (REPM) scheme will significantly strengthen India's supply chains for electric vehicles (EVs) and wind energy.

By establishing a fully integrated domestic manufacturing ecosystem for REPMs, the scheme will reduce India's heavy dependence on China, which currently dominates over 90% of global rare earth magnet production.

This move is expected to secure a stable and resilient supply of critical magnet materials essential for high-efficiency motors used in EVs and wind turbines, thereby insulating these sectors from geopolitical and supply chain disruptions.​

The scheme’s integrated value chain—from rare earth oxides to finished magnets—will enable indigenous production of NdFeB magnets, which are vital for EV traction motors and wind turbine generators.

This will help meet the projected exponential rise in demand aligned with India’s target of 30% EV penetration by 2030 and expanded renewable energy capacity, particularly wind power. The initiative will also unlock investments in advanced mobility and renewable technologies, catalysing growth in clean energy sectors.​

Indian automotive and renewable energy industries will benefit from reduced import dependencies and enhanced technological competitiveness.

Local production will shield manufacturers from export controls imposed by China, which have caused delays and uncertainties in procurement, thereby streamlining and securing critical component availability for EV manufacturing and wind turbine production domestically.​

This positions India for self-reliance in defence—aerospace applications like F-35 equivalents—while bolstering EVs, wind energy, and electronics against supply vulnerabilities.​

Agencies