The Union Cabinet chaired by Prime Minister Narendra Modi on 26 November approved a ₹7,280 crore scheme aimed at promoting the production of Sintered Rare Earth Permanent Magnets (REPM), the government informed in an official release today.
This is a “first-of-its-kind” initiative by the central government to support the REPM ecosystem, “enhancing self-reliance and positioning India as a key player in the global REPM market”, he added.
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Why is this announcement significant?
“The system will support the production of rare earth permanent magnets. The aim is to create a capacity of 6,000 MTPA (metric tonnes per annum),” Information and Broadcasting Minister Ashwini Vaishnaw told reporters during a cabinet briefing after the meeting.
In particular, rare earth magnets are used in large industries such as electric vehicles (EVs), aerospace, electronics, medical devices, and defense.
What will the new scheme do?
- According to the official version, the REPM scheme will support domestic production of 6,000 MTPA of sintered REPM.
- It will also strengthen supply chains for the automotive, defense and aerospace industries.
- It also seeks to support India’s Atmanirbhar Bharat Abhiyan and commitment to Net Zero by 2070.
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The REPM Center Scheme: Everything We Know
The Cabinet today approved the “Scheme to Promote Production of Rare Earth Sintered Permanent Magnets” with a financial outlay of Rs 7280 crore. This first-of-its-kind initiative aims to establish 6,000 metric tonnes per annum (MTPA) of integrated rare earth permanent magnet (REPM) manufacturing in India, increasing self-sufficiency and making India a key player in the global REPM market.
REPMs are one of the strongest types of permanent magnets and are vital for electric vehicles, renewable energy, electronics, aerospace and defense applications. The program will support the creation of integrated REPM production facilities, including the conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs.
India’s REPM consumption is expected to double from 2025 to 2030 due to rapidly growing demand for electric vehicles, renewable energy, industrial applications and consumer electronics. Currently, India’s REPM demand is met primarily through imports. The initiative will see India set up its first-ever integrated REPM manufacturing plants, which will create employment, boost self-sufficiency and reinforce the country’s commitment to net zero by 2070.
The total financial outlay of the scheme is Rs.7280 crore, including sales related incentives of Rs. 6450 crore on REPM sales over a period of five (5) years and a capital subsidy of Rs.750 crore to set up an aggregate of 6,000 MTPA of REPM production facilities.
The scheme envisages the allocation of total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allotted a capacity of up to 1,200 MTPA.
The total duration of the program will be 7 years from the date of contract award, including a 2-year gestation period for the establishment of an integrated REPM manufacturing plant and 5 years for the incentive payment on the sale of REPM.
This initiative by the Government of India is a milestone to strengthen the domestic REPM manufacturing ecosystem and increase competitiveness in global markets. By supporting domestic capacity in REPM production, this scheme will not only ensure a REPM supply chain for the domestic industry, but also support the national commitment to Net Zero 2070. It embodies the governments unwavering commitment to build a technologically self-sufficient, globally competitive and sustainable industrial base in line with the Viksit Bharat @2047 vision.
