Strengthening India’s Rare Earth Value Chain
Context
The Union Cabinet has approved a ₹7,280 crore scheme to develop India’s first integrated manufacturing ecosystem for Sintered Rare Earth Permanent Magnets. The initiative aims to reduce import dependence by establishing a complete domestic value chain from rare-earth oxides to high-performance finished magnets.
Nature of the Scheme
• A national initiative to build a fully domestic supply chain for REPMs including oxide conversion, metal refining, alloy making, and sintered magnet production
• Implemented by the Ministry of Mines with oversight from the Department of Atomic Energy and NITI Aayog
Targets
• Establishment of 6,000 MTPA domestic REPM manufacturing capacity
• Selection of five beneficiaries through global competitive bidding, each up to 1,200 MTPA
• Creation of India’s first complete and integrated REPM value chain
Financial Structure
• Total outlay of ₹7,280 crore for large-scale ecosystem development
• ₹6,450 crore as sales-linked incentives over five years to ensure competitiveness
• ₹750 crore as capital subsidy to support oxide-to-metal conversion and sintering technologies
Duration and Implementation
• Seven-year scheme period for full ecosystem development
• Two-year gestation period for plant construction and system installation
• Five-year incentive period to support scaling of magnet production and reduce import dependence
Integrated Value Chain Coverage
• Support for all stages of the REPM manufacturing chain
• Coverage includes rare-earth oxides, metals, alloys, and NdFeB sintered magnets
• Promotes supply-chain security, efficiency, and reduced production costs
About Sintered Rare Earth Permanent Magnets
• NdFeB magnets are the strongest commercial permanent magnets globally
• Essential for high-performance applications due to strength, heat resistance, and compact size
India’s Current Position
• India holds 6.9 million tonnes of rare-earth reserves, the fifth largest globally
• Contribution to global rare-earth production is around one percent
• Domestic demand for REPMs is met almost entirely through imports
• China controls nearly ninety percent of global REPM production, creating strategic vulnerabilities for India
Key Characteristics of REPMs
• High magnetic strength suitable for advanced technologies
• Strong thermal stability and efficiency
• Widely used in EV motors, wind turbines, defence systems, electronics, and precision instruments
Conclusion
The scheme marks a critical step in enhancing India’s technological and strategic capabilities. By creating a complete domestic REPM value chain, the initiative will reduce import dependence, strengthen national security, support advanced manufacturing, and help India compete globally in emerging sectors such as renewable energy and electric mobility.
Source : PIB