✅ Summary of the Government’s New Rare Earth Magnet Scheme
1. Scheme Approval
The Union Cabinet, chaired by PM Narendra Modi, approved a ₹7,280-crore scheme.
Aim: Boost domestic manufacturing of rare earth permanent magnets (REPMs).
2. Why This Scheme?
India heavily depends on China, which controls 90% of global rare earth magnet processing.
Recent Chinese export restrictions caused shortages for Indian industries.
India wants to build a resilient and self-reliant supply chain.
3. Strategic Importance
Rare earth magnets are essential for:
Electric vehicles (EVs)
Wind turbines
Smartphones & consumer electronics
Aerospace and defence systems
Robotics and industrial machinery
4. Key Features of the Scheme
Official name: Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPMs).
Goal: Create 6,000 metric tonnes per year production capacity in India.
India currently consumes 4,000–5,000 tonnes per year; this will double by 2030.
5. Fully Integrated Manufacturing Ecosystem
The scheme will support companies to set up end-to-end facilities, including:
Processing rare earth oxides → metals
Turning metals → specialised alloys
Producing finished magnets
This will be India's first fully integrated REPM ecosystem.
6. Beneficiary Selection
A global bidding process will select five companies.
Each can manufacture up to 1,200 MTPA.
Both public and private companies are eligible.
7. Financial Structure
Total outlay: ₹7,280 crore
₹6,450 crore → sales-linked incentives
₹750 crore → capital subsidy
Scheme duration: 7 years
2 years: Set up units
5 years: Incentives based on sales
8. Supply Chain & Global Strategy
India exploring collaborations with:
Australia
Japan
Aimed to diversify sourcing and reduce China dependency.
9. Domestic Resource Availability
India has 6.9 million tonnes of rare earth reserves.
But lacks large-scale magnet manufacturing capability.
This scheme aims to close that gap.
10. Expected Outcomes
Reduce import dependence in 3–4 years.
Create high-skill jobs.
Enable India to export surplus magnets in future.
Boost India’s competitiveness in global markets.
Support India’s Net Zero 2070 goals (because magnets are critical for green technologies).
📘 What Are Rare Earth Elements?
Rare earth elements (REEs) are a group of 17 metallic elements found in the earth’s crust.
They include elements like neodymium, praseodymium, dysprosium, terbium, etc.
They are not actually rare, but are difficult and expensive to extract and purify.
🔥 Why Are Rare Earth Magnets Important Now?
Rare earth magnets—especially Neodymium-Iron-Boron (NdFeB) magnets—are the strongest permanent magnets known.
They are becoming extremely important because:
1. EV Boom
Electric vehicle motors depend heavily on rare earth magnets for efficiency and performance.
2. Renewable Energy
Wind turbines use large rare earth magnets.
3. Electronics Growth
Smartphones, laptops, drones, speakers all use REE magnets.
4. Defence & Security
Used in missiles, radar, fighter jets, satellites, etc.
5. China Factor
China dominates:
Mining
Refining
Magnet production
Thus, rare earths have become a strategic and geopolitical resource, like oil in the 20th century.
🌍 Why Important Now (In 2025)?
EV and renewable energy sectors are expanding rapidly.
China has started restricting exports of rare earth materials.
Global industries are facing shortages.
Countries (US, Japan, EU, India) are trying to secure supply chains.
Rare earth magnets are crucial for the green energy transition.
