The Union Cabinet approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)' with a total financial outlay of ₹7,280 crore in late November 2025, with implementation underway as of December 31, 2025. The scheme aims to establish India's first integrated domestic manufacturing ecosystem for high-value rare earth permanent magnets, targeting a production capacity of 6,000 metric tonnes per annum (MTPA). The financial structure includes ₹6,450 crore as sales-linked incentives disbursed over five years and ₹750 crore as capital subsidy for setting up advanced manufacturing facilities. Up to five beneficiaries will be selected through global competitive bidding, each eligible for up to 1,200 MTPA. The scheme will be implemented over seven years — a two-year gestation period followed by five years of incentive disbursement. Rare earth permanent magnets are critical components in electric vehicles (EVs), wind turbines, consumer electronics, aerospace systems, and defence equipment. Currently, China dominates over 90% of global REPM production, making India heavily import-dependent. The scheme aligns with India's net-zero by 2070 target, Viksit Bharat 2047 vision, and the broader push for Atmanirbhar Bharat in critical minerals and advanced manufacturing sectors.
Cabinet Approves ₹7,280 Crore Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM): India's Push for Clean Energy and Defence Supply Chain Self-Reliance
The Union Cabinet approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)' with a total financial outlay of ₹7,280 crore in late November 2025, with implementation underway as of December 31, 2025. The scheme aims to establish India's first integrated domestic manufacturing ecosystem for high-value rare earth permanent magnets, targeting a production capacity of 6,000 metric tonnes per annum (MTPA). The financial structure includes ₹6,450 crore as sales-linked incentives disbursed over five years and ₹750 crore as capital subsidy for setting up advanced manufacturing facilities. Up to five beneficiaries will be selected through global competitive bidding, each eligible for up to 1,200 MTPA. The scheme will be implemented over seven years — a two-year gestation period followed by five years of incentive disbursement. Rare earth permanent magnets are critical components in electric vehicles (EVs), wind turbines, consumer electronics, aerospace systems, and defence equipment. Currently, China dominates over 90% of global REPM production, making India heavily import-dependent. The scheme aligns with India's net-zero by 2070 target, Viksit Bharat 2047 vision, and the broader push for Atmanirbhar Bharat in critical minerals and advanced manufacturing sectors.
Key facts
- Cabinet approved ₹7,280 crore scheme to promote manufacturing of sintered Rare Earth Permanent Magnets.
- The scheme targets 6,000 metric tonnes per annum production capacity for rare earth magnets.
- Financial structure includes ₹6,450 crore as sales-linked incentives over five years.
- REPMs are critical for EVs, wind turbines, defence systems, and consumer electronics.
- India currently imports nearly 100% of its rare earth permanent magnet requirements.
- The scheme supports India's clean energy transition and defence supply chain self-reliance.
Mains angle
Q: Evaluate the strategic rationale behind the Cabinet-approved ₹7,280 crore scheme for manufacturing Sintered Rare Earth Permanent Magnets in India and its implications for clean energy and defence self-reliance.
Answer (50 words):
The Cabinet approved ₹7,280 crore for rare earth permanent magnet manufacturing targeting 6,000 metric tonnes annual capacity. Five beneficiaries receive ₹6,450 crore in sales-linked incentives over seven years. China controls over 90% of global production, making this critical for reducing import dependence in electric vehicles and defence.
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What is the total financial outlay of the Cabinet-approved Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)?
The Cabinet approved the REPM manufacturing scheme with a total outlay of ₹7,280 crore — ₹6,450 crore in sales-linked incentives over five years and ₹750 crore as capital subsidy — targeting 6,000 MTPA capacity.
Source: PM India / PIB / Down To Earth / Energetica India / Business Standard
Frequently asked questions
What is the total financial outlay of the Cabinet-approved REPM scheme and what production target does it set?
The Union Cabinet approved the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM) with a total financial outlay of ₹7,280 crore. The scheme targets a production capacity of 6,000 metric tonnes per annum (MTPA).
Why are Rare Earth Permanent Magnets (REPMs) strategically important for India?
REPMs are critical components in electric vehicles (EVs), wind turbines, defence systems such as missiles and radar, and consumer electronics. Imports continue to meet a large part of India's current REPM requirements, making domestic manufacturing essential for energy security, defence self-reliance, and supply chain independence.
What is the financing structure of the REPM scheme?
Of the total ₹7,280 crore outlay, ₹6,450 crore is structured as sales-linked incentives (SLI) distributed over five years, encouraging manufacturers to scale up production. The remaining funds support infrastructure and advanced technology acquisition.
Which countries dominate global rare earth magnet supply and why is India's dependence a concern?
China dominates global rare earth mining and REPM manufacturing, controlling over 85% of global supply. India's high import dependence on REPMs creates strategic vulnerabilities in its EV, clean energy, and defence supply chains — the REPM scheme directly addresses this by building domestic capacity.
How does the REPM scheme support India's clean energy and Aatmanirbhar Bharat goals?
REPMs are essential for manufacturing EV motors and wind turbine generators — two pillars of India's clean energy transition. By building domestic REPM manufacturing capacity, the scheme reduces import dependency, supports the Make in India initiative, and strengthens both the clean energy and defence supply chains under the Aatmanirbhar Bharat mission.
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