The Union Cabinet has approved a Rs 7,280-crore scheme to establish an integrated rare-earth permanent magnet manufacturing ecosystem.
Five units with a combined capacity of 6,000 TPA are expected to begin production in two to three years, replacing India’s current import dependence.
The plan aims to create India’s first end-to-end rare-earth value chain, with CAPEX support and production-linked incentives.
Officials say the initiative will strengthen supply chains for EVs, electronics, defence and aerospace while meeting high environmental standards.
India will establish an integrated rare-earth permanent magnet (REPM) manufacturing ecosystem with a budgetary outlay of Rs 7,280 crore over seven years, the Union Cabinet announced on November 26, 2025. The move is aimed at reducing import dependence and strengthening supply chains for electric mobility, electronics, defence and aerospace — sectors that rely heavily on high-performance permanent magnets.
Union Minister for Railways Ashwini Vaishnaw described the approval as a “major strategic decision” that follows India’s recent missions on semiconductors and critical minerals.
Announcing the decision on November 26, Vaishnaw said the scheme would set up 6,000 tonnes per annum (TPA) of REPM manufacturing capacity through five units of 1,200 TPA each, with production expected to begin within two to three years. India currently consumes about 4,000-5,000 TPA of permanent magnets, all of which are imported.
“By the completion of this programme, our import dependence for permanent magnets will practically reduce to zero. India will become fully self-reliant in this strategic sector,” Vaishnaw told reporters at a briefing at the National Media Centre.
The programme marks India’s first effort to build the entire value chain, from rare-earth oxide refining to metal, alloy and sintered magnet manufacturing within the country. The scheme will offer capital expenditure support of around 30 per cent as well as production-linked incentives. Total investment is expected to be roughly three times the government’s budgetary commitment, according to Vaishnaw.
India is among the world’s top three countries in rare-earth reserves, with 6.9 million tonnes spread across coastal placer sands in Odisha, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Goa, Maharashtra and Gujarat, as well as hard-rock deposits in Rajasthan and Gujarat. Vaishnaw said the scheme aligns with the Critical Minerals Mission and the government’s semiconductor manufacturing push.
“Without permanent magnets and semiconductor chips, modern manufacturing simply cannot run. This programme gives India supply-chain resilience and strategic strength,” he said.
The minister said industry consultations drew “very enthusiastic response” from electronics, electric vehicle, steel, medical equipment and defence manufacturers. India is also collaborating with countries such as Japan and Australia on critical minerals and magnet technologies.
The scheme is expected to accelerate adoption of clean mobility solutions and support India’s broader sustainability goals, said Shailesh Chandra, president of Society of Indian Automobile Manufacturers. “By strengthening indigenous manufacturing capabilities, it will contribute to reducing carbon emissions and lowering dependence on crude oil imports, further enhancing the nation’s energy security.”
Responding to concerns about radiation-bearing beach sand minerals, Vaishnaw said extraction and processing would follow established protocols under the Department of Atomic Energy and would mandate “the highest environmental standards”.
On questions about environmental impacts linked to rare-earth mining in the Rajasthan’s Aravalli region, he told Down To Earth that the scheme would ensure such concerns are addressed as domestic production expands.
Both government and private companies in sectors including semiconductors and automotive manufacturing have expressed interest in the initiative, the minister said, though he did not name specific firms.
Vaishnaw emphasised that the REPM scheme would position India as a significant player in global permanent magnet supply chains, with surplus capacity expected to support exports as domestic demand rises.
“India has to be one of the world’s major permanent-magnet producers in the coming years. Today’s decision sets that roadmap,” he said.
Union Minister for Heavy Industries HD Kumaraswamy echoed the sentiment on social media platform X (formerly Twitter), writing: “Through the REPM initiative, we are building the strongest class of permanent magnets; critical for EVs, wind turbines, electronics, defence and aerospace. This will empower India’s clean-tech industries, reduce strategic dependencies, and accelerate our march towards the Net Zero 2070 vision.”