The Union Cabinet has recently approved a significant Rs. 7,280-crore initiative to establish India’s first integrated manufacturing ecosystem for Sintered Rare Earth Permanent Magnets (REPMs). This move is crucial for addressing the nation’s heavy reliance on imports for these essential components.
India currently imports nearly all of the rare earth permanent magnets it utilizes, amounting to around 900 tonnes annually. Despite possessing the world’s fifth-largest reserves of rare earth elements, the country lacks a robust local manufacturing ecosystem.
These magnets are critical for various high-tech applications, including:
With demand projected to double by 2030, primarily due to the growing EV and renewable energy sectors, establishing local production capabilities is imperative.
The scheme includes a comprehensive financial structure:
Spanning a total of seven years, the initiative comprises two years for establishing plants and five years for incentive disbursements.
The scheme will allocate a total capacity of 6,000 million tonnes per annum (MTPA) to five selected manufacturers, each eligible for up to 1,200 MTPA. Beneficiaries will be chosen through a transparent global bidding process. They must develop full-stack facilities capable of:
This integrated approach is vital for reducing dependency on foreign markets for both finished REPMs and upstream supply chains.
The production of REPMs, particularly Neodymium-Iron-Boron (NdFeB) magnets, is essential for efficient EV motors. The automotive sector has welcomed this initiative, seeing it as a significant step toward establishing a stable, localized component supply chain.
Moreover, these magnets play a critical role in:
Enhancing local manufacturing capabilities will bolster India’s defense security and reduce reliance on geopolitically sensitive supply chains.
This scheme aligns with India’s target of achieving Net Zero by 2070 and supports the National Critical Minerals Mission, which highlights REPMs as strategic components for energy transition and advanced manufacturing.
Experts believe this initiative will stimulate advancements in mining, processing, alloying, and research into high-value materials.
The automotive and component manufacturing industries have hailed this decision as pivotal for India's long-term competitiveness within global value chains. They emphasize that local production of REPMs will:
Given that China controls over 80% of global REPM processing and has tightened export controls, India's initiative is not merely economic but also strategic, ensuring resilience against external shocks.
Experts warn that successful implementation will depend on:
These elements are crucial for India to compete effectively in the global REPM market.
Q1. What is the purpose of India’s Rs. 7,280 crore Rare Earth Magnet scheme?
Answer: The scheme aims to establish an integrated manufacturing ecosystem for Sintered Rare Earth Permanent Magnets (REPMs) to reduce import dependency and boost local production for EV and defense sectors.
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