Cabinet Approves Rare Earth Permanent Magnets Scheme, Know All about this Scheme

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a new scheme worth ₹7,280 crore to promote the manufacturing of Sintered Rare Earth Permanent Magnets (REPMs) in India. This is the first-ever initiative by the Government of India to build a complete REPM manufacturing ecosystem within the country. The announcement was made on 26 November 2025. The government has stated that the scheme is a major step toward building a technologically self-reliant, globally competitive, and sustainable industrial base, in line with the vision of Viksit Bharat @ 2047.

Key Objective of the Rare Earth Permanent Magnets (REPMs) Scheme

The scheme aims to establish 6,000 Metric Tons Per Annum (MTPA) of integrated REPM manufacturing capacity in India. This will help reduce dependence on imports and position India as a significant player in the global REPM market. REPMs are among the strongest permanent magnets and are widely used in:

• Electric vehicles
• Renewable energy systems
• Defence and aerospace sectors
• Electronics and industrial machinery

Currently, most of India’s demand for REPMs is met through imports, and demand is expected to double by 2030. The scheme will support the entire REPM production chain, including:

• Converting rare earth oxides to metals
• Converting metals into alloys
• Manufacturing alloys into finished rare earth permanent magnets

This will ensure a fully integrated domestic manufacturing ecosystem.

Rare Earth Permanent Magnets (REPMs) Budget

The total outlay of ₹7,280 crore includes:

• ₹6,450 crore as sales-linked incentives, provided for 5 years
• ₹750 crore as capital subsidy for setting up 6,000 MTPA of REPM manufacturing capacity

The total duration of the scheme is 7 years, which includes:

• 2 years for setting up manufacturing facilities (gestation period)
• 5 years of incentive disbursement

Beneficiaries and Capacity Allocation

The government will allocate the manufacturing capacity to five companies through a global competitive bidding process. Each selected company may receive up to 1,200 MTPA of the total capacity.

What Are Rare Earth Permanent Magnets?

Rare Earth Permanent Magnets (REPMs) are very powerful magnets made from special metals called rare earth elements. They are the strongest permanent magnets available today and retain their magnetic strength without electricity. These magnets are essential in many modern technologies.

Why They Are Called “Rare Earth”?

They are made from elements found in the rare earth group of the periodic table, mainly:

• Neodymium (Nd)
• Samarium (Sm)
• Dysprosium (Dy)
• Praseodymium (Pr)

These elements give the magnets very high strength and good heat resistance.

Types of Rare Earth Permanent Magnets

1. Neodymium Magnets (NdFeB)
   These are the strongest magnets in the world. They are used in electric vehicles, mobile phones, speakers, and wind turbines.
2. Samarium Cobalt Magnets (SmCo)
   These can withstand high temperatures, so they are used in defence, aerospace, and high-performance machinery.

Where REPMs Are Used?

• Electric vehicles (EV motors)
• Wind turbines
• Mobile phones and laptops (speakers, camera modules, vibration motors)
• Defence and aerospace systems
• Medical equipment like MRI machines
• Industrial robots and automation machines

Why They Are Important for India?

• India currently imports almost all of its REPM requirements.
• Demand will double by 2030 due to EVs, renewable energy, and electronics growth.
• Global supply is dominated by a few countries, especially China.
• Domestic production will reduce dependence and support Atmanirbhar Bharat.

This is why the Government of India launched the ₹7,280 crore REPM manufacturing scheme.