Atmanirbhar Bharat boost for rare earths! Cabinet clears Rs 7,200 crore scheme for manufacturing rare earth permanent magnets - why it’s important

India bets on 'Atmanirbharta' for rare earths! In a boost to India's domestic rare earth manufacturing capabilities, PM Narendra Modi-led Union Cabinet on Wednesday cleared an over Rs 7,200 crore Rare Earth Permanent Magnets (REPM) Scheme. The scheme aims to establish integrated manufacturing facilities with a capacity of 6,000 Metric Tons per Annum (MTPA) of Rare Earth Permanent Magnets. The initiative hopes to strengthen India's self-sufficiency and global market presence. The move assumes significance as China, the biggest supplier of rare-earth magnets, has been restricting supplies.REPMs, believed to be amongst the most powerful permanent magnets available, serve as essential components in various sectors including electric vehicles, renewable energy, electronics, aerospace and defence industries. Currently dependent on imports for REPM needs, this initiative marks India's first integrated REPM manufacturing facilities, creating jobs, enhancing self-sufficiency and supporting the country's Net Zero target by 2070. The scheme includes Rs 6,450 crore as sales-linked incentives for REPM sales over five years, alongside Rs 750 crore capital subsidy for establishing 6,000 MTPA of REPM production facilities. Announcing the decision, Information and Broadcasting Minister Ashwini Vaishnaw stressed on the strategic importance of the initiative ,which is a first-of-its kind. “This is a very important, strategic decision,” he said. According to Vaishnaw India has one of the largest rare earth deposits in the world.At present, India remains significantly dependent on imports of rare-earth permanent magnets, with China being the main source. The scheme is part of India’s comprehensive strategy to establish secure supply chains for essential minerals whilst developing domestic technological capabilities in emerging industrial domains.The approved scheme will facilitate the development of comprehensive REPM manufacturing units that will oversee the entire process from converting rare earth oxides into metals, transforming metals into alloys, and finally producing finished REPMs.India expects a twofold increase in REPM consumption by 2030 compared to 2025, primarily due to higher demand from electric vehicles, renewable energy, industrial sectors and consumer electronics. Through a global competitive bidding procedure, the scheme plans to distribute the total capacity among five recipients. Each selected recipient will receive an allocation of up to 1,200 MTPA capacity.The scheme's implementation spans seven years from the award date, incorporating a two-year establishment period for integrated REPM manufacturing facilities, followed by five years dedicated to disbursing incentives for REPM sales.The scheme's focus on developing local REPM production expertise will ensure a secure supply chain for national industries and contribute towards achieving the country's Net Zero 2070 targets.