Strategic Need for Domestic Magnet Production
India’s Push for Rare Earth Magnet Manufacturing: India has introduced a dedicated scheme to boost the manufacturing of sintered rare earth permanent magnets, a critical component for high-technology industries. These magnets are widely used in electric mobility, renewable energy, aerospace, electronics, and strategic defence applications. The move aims to reduce India’s heavy import dependence, especially on global rare earth processing hubs.
The scheme strengthens India’s position in the global mineral supply chain. Static GK fact: India holds one of the world’s largest deposits of monazite, a major rare earth source, primarily found in Odisha, Tamil Nadu, and Kerala.
Key Financial Structure
The scheme carries a financial outlay of ₹7,280 crore, designed to encourage private participation through both sales incentives and capital support. A total of ₹6,450 crore will be provided as sales-linked incentives over a five-year operational period. Additional support of ₹750 crore is allocated as capital subsidy to help companies establish advanced processing and manufacturing facilities.
This dual structure ensures that the industry not only invests in infrastructure but also scales production sustainably.
Capacity Creation and Beneficiary Allocation
The scheme aims to build 6,000 MTPA of integrated manufacturing capacity for rare earth magnets. This entire capacity will be distributed among five beneficiaries, each eligible to receive up to 1,200 MTPA. The selection process will follow a global competitive bidding model to attract high-quality domestic and international companies.
Static GK Tip: The Ministry of Mines and the Department of Atomic Energy jointly oversee rare earth mineral policy and regulation in India.
Encouraging End-to-End Integration
A major feature of the scheme is its focus on end-to-end manufacturing integration. Beneficiaries will be supported in establishing plants capable of handling the full chain—from rare earth oxides to metals, alloys, and final permanent magnets. This is crucial because India currently lacks large-scale processing capacity for rare earth metals and alloys.
Integrated facilities will enhance India’s technological independence and reduce vulnerabilities in global supply disruptions.
Implementation Timeline
The total duration of the scheme is seven years, divided into two phases. The first two years will serve as the gestation period for setting up industrial facilities. The following five years will be dedicated to sales-linked incentive disbursement.
This structured timeline gives companies adequate space to develop high-precision units, acquire technical expertise, and stabilise production output.
Importance of Sintered Rare Earth Magnets
Sintered rare earth permanent magnets are produced by heating magnet materials without melting them. This process improves the magnets’ strength, corrosion resistance, and overall magnetic performance. These magnets rely heavily on rare earth elements such as neodymium, dysprosium, and praseodymium.
India’s domestic manufacturing push supports sectors like EVs, wind turbines, satellite systems, and aircraft technologies, which rely extensively on high-performance magnets.
Static Usthadian Current Affairs Table
India’s Push for Rare Earth Magnet Manufacturing:
| Topic | Detail |
| Scheme Objective | Promote domestic manufacturing of rare earth permanent magnets |
| Total Outlay | ₹7,280 crore |
| Sales-Linked Incentives | ₹6,450 crore over five years |
| Capital Subsidy | ₹750 crore |
| Total Manufacturing Capacity | 6,000 MTPA |
| Number of Beneficiaries | Five companies |
| Maximum Allocation per Beneficiary | 1,200 MTPA |
| Scheme Duration | Seven years |
| Gestation Period | First two years for facility setup |
| Key Applications | EVs, renewable energy, defence, electronics |
