India is building its own supply chain for rare earth permanent magnets (REPMs). On 26 November 2025, the Union Cabinet approved a Rs 7,280 crore scheme for this purpose. Together, the scheme targets 6,000 metric tonnes per annum (MTPA) of integrated capacity. Moreover, it comes after China curbed exports of these magnets in 2025. Hence, it is a key step for clean energy and defence supply chains.
What the Cabinet Approved
Officially, the scheme is the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets. Of the outlay, Rs 6,450 crore will go as sales-linked incentives over five years. In addition, Rs 750 crore will support new plants as capital subsidy. Also, Union Minister Ashwini Vaishnaw called it a “very important, strategic decision.”
Five Beneficiaries, Seven Years
The government will pick five beneficiaries through global competitive bidding. Then, each can get up to 1,200 MTPA of capacity. The scheme runs for seven years from the award date. First comes a two-year gestation period for setting up plants. After that, incentives follow on magnet sales for five years.
Why China’s Curbs Matter
Currently, China controls over 90% of global sintered magnet production. In 2025, Beijing imposed export restrictions on these magnets during its trade dispute with the US. Meanwhile, India still meets most of its REPM demand through imports. Also, the government expects Indian demand to double by 2030.
Latest Update
Later, the ministry invited bids on 20 March 2026. Under the tender, IREL (India) Limited will supply some NdPr oxide to the three lowest bidders. Finally, it opened technical bids on 13 August 2026 after receiving 20 bids. For example, bidders include Larsen & Toubro, Coal India, ReNew and Attero Recycling.
What Are REPMs?
REPMs are the strongest type of permanent magnet. In fact, most are neodymium-iron-boron (NdFeB) magnets. So, they power electric vehicle motors, wind turbines, electronics, aerospace and defence systems. Also, rare earths are a group of 17 elements, including the 15 lanthanides, scandium and yttrium.
Rare Earth Permanent Magnets: Key Facts for Revision
- Cabinet approval: 26 November 2025
- Outlay: Rs 7,280 crore (Rs 6,450 crore incentives + Rs 750 crore capital subsidy)
- Capacity target: 6,000 MTPA, with five beneficiaries
- Tenure: Seven years, including two years of gestation
- Nodal ministry: Ministry of Heavy Industries
Why Rare Earth Permanent Magnets Matter for UPSC and UKPSC
Notably, critical minerals now shape geopolitics and industrial policy. So, remember the outlay, the capacity target and the scheme tenure. Also, link it with China’s export curbs and India’s clean energy goals. For official updates, also visit the Ministry of Heavy Industries. Next, for a related story, read about the Samudra Manthan offshore exploration scheme.
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