India is taking a major step toward self-reliance in advanced manufacturing by promoting the domestic production of rare earth magnets — a critical component in electric vehicles, wind turbines, defence systems, and modern electronics. The government’s new ₹7,300 crore scheme is designed to reduce dependence on Chinese imports and strengthen India’s strategic position in global supply chains.
Rare earth magnets are powerful permanent magnets made from rare earth elements such as neodymium, samarium, and dysprosium. Their exceptional magnetic strength and durability make them indispensable in key technologies — from electric vehicles and renewable energy systems to defence and consumer electronics.
The Government of India plans to launch a ₹7,300 crore scheme aimed at encouraging domestic production of rare earth magnets. The initiative envisions manufacturing approximately 6,000 tonnes of magnets annually using around 2,000 tonnes of rare earth oxides. The goal is to build a robust local ecosystem that supports high-tech manufacturing.
Leading international players such as Lynas Rare Earths (Australia), Iluka Resources (Australia), and Rainbow Rare Earths (UK) have expressed interest in collaborating with India. These firms are part of a global effort to diversify rare earth supply chains and reduce reliance on China.
The Union Ministry of Heavy Industries, through Bharat Heavy Electricals Limited (BHEL), has initiated discussions with international companies to explore long-term partnerships for raw material sourcing and magnet manufacturing. These collaborations are expected to bring both technology and investment into India’s rare earth sector.
Prominent domestic firms such as Bharat Forge, Mahindra, and JSW are expected to collaborate with global partners to develop an indigenous supply chain. Their focus will be on producing magnets for electric mobility, renewable energy, and defence applications, sectors that are vital to India’s industrial and environmental goals.
The scheme offers attractive incentives — companies investing at least ₹200 crore will receive benefits worth about 15% of their total investment. Additional incentives are reserved for firms that set up end-to-end manufacturing facilities within India, covering everything from processing raw materials to producing finished magnets.
This initiative is a part of India’s larger mission to reduce Chinese dominance in the rare earth supply chain. By developing domestic extraction and processing capabilities, India aims to secure access to critical materials essential for clean energy, electric vehicles, and defence. The move aligns with the country’s vision of Atmanirbhar Bharat (self-reliant India) and its commitment to sustainable industrial growth.
India’s ₹7,300 crore rare earth magnet scheme aims to boost local production and reduce reliance on China. Global companies like Lynas, Iluka, and Rainbow are exploring partnerships, while Indian firms such as BHEL, Mahindra, and JSW will lead domestic efforts. With 6,000 tonnes of annual production targeted, this initiative strengthens India’s supply chain for clean energy and advanced manufacturing.
Conclusion: The rare earth magnet scheme positions India as a competitive and sustainable global manufacturing hub, advancing both its energy transition and economic resilience goals.
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