The government’s newly approved ₹7,280-crore scheme to produce rare-earth permanent magnets (REPM) marks a strategic shift for India’s EV and clean-tech ambitions. Under this plan, India aims to establish integrated magnet-manufacturing capacity of 6,000 tonnes per year, covering the full supply chain from rare-earth oxides to finished magnets.
Rare-earth magnets, commonly made from alloys of neodymium, praseodymium and other rare earths — are key components in the electric motors used in electric vehicles, as well as in renewable energy, electronics and defence systems.
India currently imports nearly all its rare-earth magnets, mainly from China, which dominates global production and processing.The new scheme is meant to reduce this heavy dependence, especially after China’s recent export curbs disrupted global supplies, a move that hit the EV industry and auto manufacturers hard.
Over five years companies that set up approved REPM manufacturing facilities will get sales-linked incentives and capital subsidies to encourage production and investments.
Analysts believe this could lead to a drop in EV costs (by 5–15%), once domestic magnets replace expensive imports, making electric vehicles more affordable and improving supply-chain resilience.
However, experts caution that the scheme alone doesn’t solve all challenges: India still imports 100% of lithium-ion battery cells, a core component of EVs. The new magnet supply chain will help, but broader localisation and battery production remain crucial for the EV push.
Overall, the rare-earth magnet scheme is a foundational move to bolster India’s EV infrastructure, reduce import dependence, and pave the way for a more self-reliant clean-tech future.
