Indian Govt announces ₹7,280 Cr scheme to set up rare-earth magnet factories for EVs, wind power, defence & advanced electronics industries

The Indian government has approved a ₹7,280-crore plan to build the country’s first full setup for producing sintered Rare Earth Permanent Magnets (REPM). 

These magnets are important for electric vehicles, wind turbines, defence machines and space systems. The move aims to reduce import dependence and support sectors that need steady access to advanced components. 

The announcement was shared online by PM Narendra Modi, who called it “a historic first for India’s high-tech manufacturing.”

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Why India wants its own rare-earth magnet supply

REPMs are strong magnets used in EV motors, wind-energy machines, satellites, aircraft systems, missiles and many electronic items. India currently imports most of its supply. With EV sales rising and renewable-energy projects expanding, the need for these magnets is growing fast.

Relying on imports can lead to shortages, higher costs and delays. Only a few countries control most of the world’s supply, which adds further risk. Creating local capacity gives India more control and stability.

The plan aims to set up 6,000 MTPA (Metric Tons Per Annum) of REPM production, covering every stage — from converting rare-earth oxides into metals, to making alloys, to producing finished magnets. This step is expected to give Indian companies a smoother supply line as they expand into high-tech areas.

The announcement also stated that the effort would “strengthen self-reliance and support clean-energy goals.”

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Key details of the ₹7,280-crore Rare-Earth Magnet scheme

The scheme includes two main types of support:

• ₹6,450 crore in sales-linked incentives for five years

• ₹750 crore as capital support to help companies set up factories

The government will choose five companies through a global bidding process, with each allowed to produce up to 1,200 MTPA.

The scheme will run for seven years — two years for building the facilities and five years for incentive payouts.

The goal is to give India a steady and local supply of rare-earth magnets so industries like EVs, wind power, defence and advanced electronics do not have to depend heavily on imports.

The plan is also expected to support new jobs and give Indian manufacturers a more stable path as they build products that need these magnets.

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