India Invests Rs 7,280 Crore to Boost Domestic Rare Earth Magnet Manufacturing for EVs and Defense

Rare earth magnets have become essential components across major industries including medical equipment and defense sectors.

New Delhi:

On Wednesday, the Union Cabinet gave approval to a comprehensive scheme aimed at boosting the manufacturing of rare earth permanent magnets with a substantial financial outlay of Rs 7,280 crore.

The 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' received approval during a Cabinet meeting led by Prime Minister Narendra Modi.

Information and Broadcasting Minister Ashwini Vaishnaw stated to reporters, "The scheme will enhance domestic manufacturing capabilities for rare earth permanent magnets. We aim to establish a production capacity of 6,000 metric tonnes per annum (MTPA)."

These specialized rare earth magnets play a crucial role in numerous industrial applications, including electric vehicles, aerospace technology, electronic devices, medical equipment, and defense systems.

According to the scheme's structure, the total manufacturing capacity will be distributed among five selected beneficiaries through a global competitive bidding process. Each beneficiary will receive an allocation of up to 1,200 MTPA of production capacity.

The scheme has been designed with a 7-year implementation timeline from the date of award. This includes an initial 2-year gestation period dedicated to establishing integrated Rare Earth Permanent Magnets (REPM) manufacturing facilities, followed by a 5-year phase for disbursing incentives based on REPM sales performance.