The Union Cabinet has approved a Rs 7,280 crore scheme to create 6,000 MTPA of integrated manufacturing capacity for sintered Rare Earth Permanent Magnets (REPM). Designed to reduce India’s reliance on imports, the initiative aims to build a complete domestic value chain for high-performance magnets essential to electric vehicles, renewable energy systems, aerospace, defence, and advanced electronics.

The scheme supports end-to-end production, from converting rare earth oxides into metals, processing metals into alloys, and manufacturing finished magnets. With India’s REPM demand expected to double between 2025 and 2030, the initiative includes Rs 6,450 crore of sales-linked incentives for five years and Rs 750 crore of capital subsidy for establishing new facilities. Capacity will be assigned to five beneficiaries through a global competitive process, with each allotted up to 1,200 MTPA. The programme will run for seven years, including a two-year setup period.

By strengthening domestic manufacturing of critical materials, the scheme is expected to accelerate India’s transition to cleaner technologies and support the nation’s Net Zero 2070 vision. It also reinforces efforts to position India as a globally competitive hub for advanced magnet production.

Speaking on the decision, Vinod Aggarwal, MD & CEO, VE Commercial Vehicles, said: “VECV welcomes the Cabinet’s approval of the Rs 7,280 crore Rare Earth Permanent Magnet (REPM) manufacturing scheme. Rare earth magnets are vital for electric drivetrains, power electronics, and high-efficiency systems that will increasingly support the commercial vehicle industry’s shift towards cleaner and more energy-efficient technologies. We appreciate the government’s vision of this forward-looking policy in creating an integrated domestic value chain, from rare earth oxides to metals, alloys, and finished magnets. By addressing a critical supply-side vulnerability in future mobility, this initiative will significantly strengthen India’s self-reliance in advanced materials. As the country moves towards its Net Zero 2070 target, the availability of locally manufactured REPMs will accelerate the adoption of next-generation electric and energy-efficient commercial vehicles. This forward-looking policy is a major boost to Make in India and will enhance the long-term competitiveness of the automotive and commercial vehicle ecosystem.”