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Govt. Approves INR 7,280 Crore Scheme to Promote Sintered Rare Earth Magnet Manufacturing

Government has approved INR 7,280 crore scheme to boost domestic manufacturing of sintered rare earth permanent magnets and strengthen India’s industrial and strategic supply chains.

December 18, 2025. By EI News Network

The Government has sanctioned a INR 7,280 crore scheme to develop a domestic manufacturing ecosystem for NdFeB (neodymium-iron-boron) rare earth permanent magnets (REPM) in India.

These magnets, made primarily from rare earth elements such as neodymium (Nd), praseodymium (Pr), and samarium (Sm), are among the strongest commercially available magnets and are widely used in electric vehicles, renewable energy, electronics, defense, and aerospace. The scheme aims to create a fully integrated value chain in India, from rare earth oxide (NdPr oxide) to metals, alloys, and finished magnets, to reduce dependence on imports and strengthen the country’s strategic and industrial capacities.

Currently, India has significant upstream capabilities in rare earth mining, separation, and oxide refining, primarily through IREL (India) Limited, a CPSU under the Department of Atomic Energy. IREL has a production capacity of 400 MTPA of NdPr oxide, sufficient to support about 1,200 MTPA of integrated NdFeB magnet production, and holds an additional stock of 500 metric tons of NdPr oxide, allowing India to support approximately 1,500 MTPA of REPM production. However, the country lacks large-scale downstream industrial capacities for converting oxide to metal, metal to alloy, and alloy to magnets, necessitating this initiative to establish a complete domestic value chain.

Under the scheme, a transparent global tender process will allocate up to 6,000 MTPA of integrated NdFeB magnet manufacturing capacity across five selected beneficiaries, with minimum allocations of 600 MTPA and multiples of 100 MTPA up to 1,200 MTPA. Beneficiaries will receive production-linked incentives tied to output and a 15 percent capital subsidy on eligible investments, including plant, machinery, equipment, utilities, R&D, product development, and technology transfer costs. IREL will supply a total of 500 MTPA of NdPr oxide to the first three beneficiaries, while the remaining oxide requirements must be arranged by the beneficiaries themselves. Performance bank guarantees will be required based on allocated capacity to ensure project execution and compliance.

The total scheme duration is seven years, consisting of a two-year testing period and five years of production-linked incentives, with the possibility of extension if the initial testing period concludes early. Oversight and implementation will be managed by an inter-ministerial Scheme Monitoring Committee (SMC), a Technical Committee (TC), and a Project Management Agency (PMA), which will coordinate online portals, incentive claims, audits, project monitoring, and reporting.

Detailed milestones, such as minimum investment requirements, production targets, and timelines, are defined, and non-compliance or misrepresentation may result in forfeiture of incentives, cancellation of awards, and recovery of funds. This scheme is designed to establish a robust domestic REPM manufacturing capability, positioning India as self-reliant in a strategically critical sector.

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