Union Heavy Industries Minister H.D. Kumaraswamy on Monday chaired a consultation with around 20 companies to discuss the ₹7,280-crore scheme designed to encourage domestic manufacturing of sintered rare earth magnets. The meeting highlights India’s effort to establish a homegrown supply chain for magnets, essential for electric vehicles (EVs), renewable energy, and defence applications.
“The consultation saw participation from over 20 industry stakeholders, and their concerns and suggestions on the scheme were discussed in detail,” Kumaraswamy said on X, formerly Twitter.
Industry concerns about raw material availability were addressed, with the government assuring that state-run India Rare Earths Ltd (IREL) will supply 500 tonnes of rare earth oxides (NdPr oxide) per year to select beneficiaries. Suppliers from outside India also committed to providing a guaranteed supply of critical inputs, boosting confidence in the scheme. NdPr oxide, which stands for neodymium-praseodymium oxide, is a key raw material for these magnets.
Under the scheme guidelines, IREL will supply raw material to the three lowest bidders, with global suppliers like Iluka, Lynas, and Rainbow having expressed interest. Senior ministry officials said the request for proposals (RFP) is in the final stages of preparation.
Incentive Scheme Details
The seven-year-long scheme, approved by the Union Cabinet in late November, aims to create 6,000 tonnes of magnet manufacturing capacity. It comes amid concerns over China’s export restrictions on rare earth magnets, with the country controlling around 60% of global mining and 90% of processing capacity.
The government will provide ₹750 crore in capital incentives for five manufacturing plants, followed by sales-linked incentives for five years after a two-year gestation period for plant setup. The initiative seeks to develop a midstream industry that converts refined rare earth oxides into magnets for defence, electronics, renewable energy, and EV applications.
The manufacturing process involves upstream mining of rare earth ores into oxides, midstream conversion into metals and magnets, and downstream fabrication for various applications.
IREL, India’s only rare earth magnet producer, has an annual capacity of 400 tonnes of rare earth oxides, sufficient to make roughly 1,200 tonnes of magnets. With a current stockpile of about 500 tonnes of oxides, the company can support production of approximately 1,500 tonnes of magnets.
