In a major step towards strengthening India’s advanced manufacturing ecosystem and reducing strategic import dependence, the Ministry of Heavy Industries (MHI) has invited bids through a global tender for the selection of beneficiaries to establish integrated Sintered Rare Earth Permanent Magnet (REPM) manufacturing facilities. The initiative is being implemented under the Government of India’s scheme to promote domestic manufacturing of rare earth magnets, with a targeted capacity of 6,000 metric tonnes per annum (MTPA).
The move marks a critical transition from policy intent to execution in a sector that underpins key industries such as electric mobility, renewable energy, electronics, and defence.
Global Tender to Attract Capable Industry Players
The Ministry has initiated a transparent global competitive bidding process to identify companies capable of setting up integrated manufacturing facilities. The tender is open to both domestic and international players with proven technical expertise and financial strength.
Under the framework, selected beneficiaries will establish end-to-end facilities covering the complete value chain—from processing rare earth oxides to producing finished sintered magnets. This integrated approach is expected to ensure efficiency, cost competitiveness, and supply reliability.
Capacity Allocation and Industrial Scale
The scheme envisages the development of a cumulative manufacturing capacity of 6,000 MTPA. This capacity will be distributed among a limited number of selected beneficiaries to ensure optimal scale and operational viability.
Each approved project is expected to have a substantial production capacity, enabling India to build a strong industrial base in rare earth magnet manufacturing—an area where domestic capability has so far remained limited.
Financial Incentives to Drive Investment
To support investments in this capital-intensive sector, the government has structured a comprehensive incentive mechanism under the approved scheme.
The ₹7,280 crore outlay includes a combination of production-linked incentives and capital support. A significant portion of the allocation is earmarked for sales-linked incentives tied to the production and sale of sintered rare earth magnets, while a dedicated component supports capital expenditure for setting up manufacturing facilities.
This dual incentive structure is designed to reduce entry barriers, improve project viability, and encourage large-scale participation.
Strategic Importance for Key Sectors
Rare earth permanent magnets, particularly neodymium-iron-boron (NdFeB) magnets, are critical components in a wide range of high-growth sectors. These include electric vehicles, wind energy systems, consumer electronics, robotics, and defence technologies.
India currently relies heavily on imports to meet its demand for these materials. With domestic demand projected to rise significantly in the coming years, the absence of local manufacturing capacity poses both economic and strategic challenges.
The scheme aims to address this gap by creating a robust domestic supply chain and reducing vulnerability to global supply disruptions.
Integrated Value Chain Development
A key feature of the scheme is its focus on building a fully integrated ecosystem rather than limiting support to downstream manufacturing. The initiative covers the entire value chain, including raw material processing, alloy production, and final magnet fabrication.
This approach is expected to enhance quality control, foster innovation, and enable India to move up the value chain in advanced materials manufacturing.
Supporting Self-Reliance and Industrial Growth
The initiative aligns closely with the broader vision of “Atmanirbhar Bharat” by promoting domestic manufacturing in a strategically important sector. It also complements ongoing efforts to strengthen India’s position in critical minerals and advanced materials.
Once operational, the facilities are expected to support multiple downstream industries, create high-skilled employment opportunities, and contribute to technological capability building.
Long-Term Industrial Impact
The scheme is structured with a long-term perspective, allowing sufficient time for project development, commissioning, and scaling of operations. Over time, it is expected to position India as a competitive player in the global rare earth magnet market.
By enabling domestic production of a critical input for modern technologies, the initiative could significantly enhance India’s industrial resilience and reduce its dependence on imports.
Conclusion
The Ministry of Heavy Industries’ decision to invite global bids for integrated REPM manufacturing facilities represents a decisive step in India’s industrial policy. By combining targeted incentives with a transparent selection process, the government is laying the foundation for a new manufacturing ecosystem in a strategically vital sector.
As global demand for rare earth magnets continues to grow, India’s proactive approach could not only secure domestic supply chains but also open new avenues for participation in the global advanced manufacturing landscape.
Source : PIB
Edited by D.Rishidhar Reddy
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