The Union Cabinet, chaired by Prime Minister Narendra Modi, on November 26, 2025 approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet (REPM)' with a total outlay of ₹7,280 crore — the first-ever initiative of its kind in India. The scheme is structured as a seven-year programme with two pillars: a ₹750 crore capital subsidy for building advanced manufacturing facilities, and a ₹6,450 crore sales-linked incentive disbursed over five years of actual magnet production. The scheme aims to create 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India. Five beneficiaries will be selected through global competitive bidding, each eligible for up to 1,200 MTPA capacity. Rare Earth Permanent Magnets are essential components of electric vehicles (EVs), renewable energy systems (wind turbines), defence equipment, aerospace, consumer electronics, and industrial motors. India currently imports almost all of the ~900 tonnes of REPMs it uses annually, with India now officially described as holding the world's third-largest rare earth resources. Domestic REPM consumption is projected to double between 2025 and 2030, driven by EV adoption and renewable energy expansion. The scheme supports India's Net Zero 2070 commitment and PLI strategy for clean energy and advanced manufacturing.
Cabinet Approves ₹7,280 Crore Scheme to Promote Domestic Manufacturing of Sintered Rare Earth Permanent Magnets
The Union Cabinet, chaired by Prime Minister Narendra Modi, on November 26, 2025 approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet (REPM)' with a total outlay of ₹7,280 crore — the first-ever initiative of its kind in India. The scheme is structured as a seven-year programme with two pillars: a ₹750 crore capital subsidy for building advanced manufacturing facilities, and a ₹6,450 crore sales-linked incentive disbursed over five years of actual magnet production. The scheme aims to create 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India. Five beneficiaries will be selected through global competitive bidding, each eligible for up to 1,200 MTPA capacity. Rare Earth Permanent Magnets are essential components of electric vehicles (EVs), renewable energy systems (wind turbines), defence equipment, aerospace, consumer electronics, and industrial motors. India currently imports almost all of the ~900 tonnes of REPMs it uses annually, with India now officially described as holding the world's third-largest rare earth resources. Domestic REPM consumption is projected to double between 2025 and 2030, driven by EV adoption and renewable energy expansion. The scheme supports India's Net Zero 2070 commitment and PLI strategy for clean energy and advanced manufacturing.
Key facts
- Union Cabinet approved a ₹7,280 crore scheme for domestic manufacturing of Rare Earth Permanent Magnets.
- The seven-year programme includes ₹750 crore capital subsidy and ₹6,450 crore sales-linked incentive.
- Target capacity is 6,000 metric tonnes per annum through five selected beneficiaries.
- REPMs are essential for EVs, wind turbines, defence systems, and consumer electronics.
- India holds the world's fifth-largest rare earth reserves but imports nearly all its REPMs.
- The scheme supports India's Net Zero 2070 commitment and PLI-driven manufacturing strategy.
Mains angle
Q: What is the significance of the ₹7,280 crore rare earth permanent magnet scheme for India's strategic mineral independence?
Answer (50 words):
Approved on November 26, 2025, the seven-year scheme provides ₹750 crore capital subsidy and ₹6,450 crore sales-linked incentive to build 6,000 MTPA integrated manufacturing capacity. Five beneficiaries are selected through global competitive bidding. India imports nearly all 900 tonnes used annually despite holding the world's third-largest rare earth resources.
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Which statement about the Cabinet-approved Rs 7,280 crore scheme to promote domestic manufacturing of Sintered Rare Earth Permanent Magnets is correct?
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets on November 26, 2025, with a total outlay of Rs 7,280 crore. Therefore, the correct year is 2025.
Source: PMIndia.gov.in / Business Standard / PIB / The Federal / Al Circle
Frequently asked questions
What is the ₹7,280 crore REPM scheme approved by the Union Cabinet and when was it approved?
The Union Cabinet, chaired by PM Narendra Modi, approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)' on November 26, 2025. It is a seven-year programme with a total outlay of ₹7,280 crore — the first such initiative in India.
What are the two funding pillars of the REPM scheme and how is the outlay split?
The scheme has two pillars: a ₹750 crore capital subsidy for building advanced manufacturing facilities, and a ₹6,450 crore sales-linked incentive disbursed over five years of actual magnet production. Five beneficiaries will be selected to achieve a target capacity of 6,000 metric tonnes per annum.
Why are Rare Earth Permanent Magnets (REPMs) strategically critical for India?
REPMs are essential components in electric vehicles (EVs), wind turbines, defence systems, robotics, and consumer electronics. As India pursues Net Zero 2070 and ramps up EV and renewable energy adoption, domestic REPM manufacturing is critical for supply chain security and reducing import dependence.
What is the paradox in India's rare earth position highlighted by the REPM scheme?
Despite holding the world's third-largest rare earth resources, India imports nearly all of its Rare Earth Permanent Magnets — primarily from China, which dominates global REPM production. The scheme aims to convert India's raw material advantage into downstream manufacturing capability.
How does the REPM scheme align with India's broader industrial and climate policies?
The REPM scheme supports India's Net Zero 2070 climate commitment by enabling domestic supply of magnets critical for EVs and wind turbines. It also aligns with the Production Linked Incentive (PLI) strategy to build India's advanced manufacturing ecosystem and reduce dependence on Chinese imports in strategic sectors.
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