Cabinet okays Rs 7,200-cr scheme to boost rare earth magnet output

New Delhi: The Union Cabinet on Wednesday cleared a major push for India’s magnet manufacturing capacity, approving a Rs 7,280-crore scheme to produce sintered rare earth permanent magnets.

"The scheme will promote manufacturing of rare earth permanent magnets. The aim is to create a capacity of 6,000 MTPA," information and broadcasting minister Ashwini Vaishnaw told reporters in New Delhi. The move, aimed at reducing import dependence in sectors ranging from EVs to aerospace, was finalised at a meeting chaired by Prime Minister Narendra Modi.

Rare earth magnets are essential components in industries including electronics, medical devices and defence.

The scheme proposes awarding capacity to five beneficiaries through a global competitive bidding process, with each allotted up to 1,200 MTPA. It will run for seven years, two years for setting up integrated manufacturing units and five years for incentive disbursement on sales.

China currently dominates the global rare earths and magnet supply chain, and recent export controls and licensing requirements from Beijing have increased the risk for countries like India that rely on imports for critical sectors.