New Delhi, 26 November. The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the ‘Scheme for Promotion of Manufacturing of Sintered Rare Earth Permanent Magnet’ with a financial outlay of Rs 7280 crore.

6,000 The objective of this initiative is to establish MTPA REPM Manufacturing

Briefing the media about the Cabinet decisions, Union Minister Ashwini Vaishnav said that this first-of-its-kind initiative aims to set up 6,000 metric tonnes per annum (MTPA) integrated rare earth permanent magnet (REPM) manufacturing in India, which will increase self-reliance and establish India as a major player in the global REPM market.

REPM the strongest type of permanent magnets

REPM is one of the strongest types of permanent magnets and is important for electric vehicles, renewable energy, electronics, aerospace and defense applications. The scheme will support creation of integrated REPM manufacturing facilities, including conversion of rare earth oxides into metals, metals into alloys and alloys into finished REPM.

Due to rapidly growing demand for electric vehicles, renewable energy, industrial applications and consumer electronics, REPM consumption in India is expected to double from 2025 to 2030. At present India’s REPM demand is met mainly through imports.

With this initiative, India will set up its first integrated REPM manufacturing facilities, generate employment, strengthen self-reliance and advance the nation’s commitment to achieve net zero by 2070.

Total financial outlay of the scheme 7280 crore rupees

It is noteworthy that the total financial outlay of the scheme is Rs 7280 crore, which includes sales-linked incentive of Rs 6450 crore on REPM sales for five (5) years and capital subsidy of Rs 750 crore for setting up a total of 6,000 MTPA REPM manufacturing facilities. The scheme aims to allocate total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allocated a capacity of up to 1,200 MT per annum.

Total duration of the scheme from the date of award of contract 7 year will be

The total duration of the scheme will be seven years from the date of award of contract, including a gestation period of two years for setting up an integrated REPM manufacturing facility and five years for disbursement of incentives on sale of REPM. This initiative of the Government is a historic step towards strengthening the domestic REPM manufacturing ecosystem and enhancing competitiveness in global markets.