India’s sudden Rs.7,280-crore shove into sintered rare earth permanent magnets made the headlines like the debut of a late runner hitting the track. Industry players cheered, markets swung a little upwards and babus hailed the move as a “strategic leap.” But beneath the cheer and the applause, the stakeholders backchatted it as a good move, but way too late.
For EV makers, wind-turbine suppliers and defence contractors, the Cabinet decision felt like long-overdue oxygen. Through most of 2025 they had been negotiating shortages, fluctuating prices and skittish shipments. Overnight, the new scheme signalled that India was finally ready to stop being a passive buyer and start building its own industrial muscle. Trade bodies rushed out statements welcoming the “decisive” turn, relieved that a chronic pain point might finally be addressed.
But as the celebratory dust settled, the sceptics began filing in. And they didn’t mince words. Analysts who’ve watched China cement its dominance over every rung of the rare earth chain – from ore to refining to specialised sintering equipment – warned that India is stepping into a game where the scoreboard is already lopsided. Many called the move a “late awakening,” the inevitable aftershock of China’s export-licensing tightening earlier this year that left Indian manufacturers scrambling.
The cautionary notes have poured in. Building magnet capacity is one thing; securing oxides, technology, equipment and trained personnel is another. Critics stressed that without a parallel push into upstream refining and tech partnerships, magnet factories could still be held hostage to Chinese suppliers. Others flagged the long gestation periods, the heavy dependence on global know-how and the real risk of delays turning the scheme into a half-realised ambition.
Yet optimism refuses to die. Supporters insist the timing still works – better late than permanently dependent. They argue India has enough pockets of expertise to scale quickly, provided the government runs clean, transparent bidding and aggressively courts global collaborators. With EV sales climbing, defence projects multiplying and wind-power targets ballooning, the domestic market is large enough, they say, to pull a new industry into maturity.
Both sides agree on one thing: this is just the opening act. What happens next – the speed of project clearances, the depth of technology partnerships, and the government’s willingness to back upstream refining – will determine whether India becomes a genuine magnet producer or remains a market forever chasing China’s tail.
For now, India has fired its starting gun. The question hanging in the air is simple and sharp: *Can a late runner still win when the leader is already out of sight?*
According to the Government, the layout aims at self-reliance and positioning India as a key player in the global Rare Earth Permanent Magnets (REPM) market
The scheme will promote domestic manufacturing of 6,000 MTPA of sintered REPM, strengthen supply chains for the automotive, defence, and aerospace sectors, and support the Atmanirbhar Bharat Abhiyan and India’s Net Zero 2070 commitment.
The Cabinet approved the ‘Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets’ with a financial outlay of Rs.7280 crore. This first-of-its-kind initiative aims to establish 6,000 Metric Tons per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing in India, thereby enhancing self-reliance and positioning India as 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 defence applications. The Scheme will support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs.
Driven by the rapidly growing demand from electric vehicles, renewable energy, industrial applications, and consumer electronics, India’s consumption of REPMs is expected to double by 2030 from 2025. At present, India’s demand for REPMs is met primarily through imports. With this initiative, India will establish its first ever integrated REPM manufacturing facilities, generating employment, strengthening self-reliance and advancing the nation’s commitment to achieve Net Zero by 2070.
The total financial outlay of the scheme is Rs.7280 crore, comprising a sales-linked incentives of Rs. 6450 crore on REPM sales for five (5) years and capital subsidy of Rs.750 crore for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities.
The scheme envisions allocating the total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allotted up to 1,200 MTPA of capacity.
The total duration of the scheme will be 7 years from the date of award, including a 2-year gestation period for setting up an integrated REPM manufacturing facility, and 5 years for incentive disbursement on the sale of REPM.
This initiative by the Government of India is a step towards strengthening the domestic REPM manufacturing ecosystem and enhancing competitiveness in the global markets. By fostering indigenous capabilities in REPM production, the scheme will not only secure the REPM supply chain for domestic industries but also support the nation’s Net Zero 2070 commitment. It embodies the Governments unwavering commitment to build a technologically self-reliant, globally competitive, and sustainable industrial base, in line with the vision of Viksit Bharat @2047.
