Cabinet greenlights ₹7,280 cr rare-earth magnet scheme

5 firms to qualify for up to 1,200 tonnes capacity each after a global bid process

- SAKET KUMAR

The Union Cabinet, in a meeting chaired by Prime Minister Narendra Modi, on Wednesday approved a ₹7,280 crore scheme to promote manufacturing sintered rare-earth permanent magnets (REPM), marking India's first attempt to build an integrated domestic supply chain for the critical material.

The “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets” aims to create a production capacity of 6,000 tonnes of REPM a year to meet growing demand from sectors such as electric vehicles, renewable energy, electronics, aerospace, and defence, ultimately boosting local manufacturing competitiveness and the broader energy transition.

Under the scheme, five beneficiaries will be selected through a global competitive bidding process, with each eligible for up to 1,200 tonnes per annum capacity.

It includes ₹6,450 crore in sales-linked incentives for five years and ₹750 crore as capital subsidy for setting up manufacturing facilities.