In a major step towards reducing reliance on imports and strengthening India’s position in advanced manufacturing, the Union Cabinet has cleared a ₹7,280-crore incentive scheme to boost domestic production of rare earth permanent magnets. The initiative aims to establish a robust end-to-end supply chain for critical minerals that fuel high-technology sectors such as electric vehicles (EVs), electronics, renewable energy, aerospace, and defence.
The scheme, which will be valid for seven years, includes a two-year gestation period for setting up integrated rare earth magnet production facilities and five years of incentive disbursement linked to sales output. It is expected to enable the creation of nearly 6,000 tonnes annual production capacity of rare earth magnets within the country.
With heavy dependence on imports—primarily from China—India’s magnet processing and refining ecosystem has long remained underdeveloped. The newly approved policy framework aims to attract global and domestic investors, encourage value addition within India, and secure access to strategic materials essential for sunrise industries. The Finance Ministry has already cleared the proposal, enabling the Cabinet to move forward with the decision.
By promoting capabilities in critical mineral processing and magnet manufacturing, the scheme aligns with the government’s larger mission of building resilient supply chains, advancing Make-in-India manufacturing, and boosting technological self-reliance.
