The Union Government officially invited bids on Friday for the establishment of a 6,000 metric tonnes per annum (MTPA) rare earth permanent magnet (REPM) manufacturing facility. This move, launched under the Ministry of Mines’ Rs 7,280-crore REPM incentive scheme, seeks to create a self-reliant ecosystem for critical minerals. By incentivising domestic production, the government aims to provide the necessary hardware for India’s burgeoning electric vehicle (EV) and wind energy sectors, which currently rely heavily on international imports for these specialised components.
The tender specifies the development of high-end Neodymium-Iron-Boron (NdFeB) magnets, essential for high-efficiency motors used in EVs and electronic devices. The scheme offers production-linked incentives (PLI) over five to seven years, with bidders required to demonstrate capabilities in processing rare earth oxides into finished magnets.
Strategic push to strengthen supply chain and reduce imports
According to the bid documents, the project will be executed in two phases, targeting full 6,000 MTPA capacity by 2029. This is expected to meet around 35–40 per cent of India’s domestic demand for high-grade permanent magnets by the end of the decade.
“This tender is a cornerstone of our strategy to secure the ‘green’ supply chain,” said a senior Ministry of Mines official, highlighting the importance of rare earth magnets in energy transition technologies.
Experts note that while India has significant reserves, it lacks mid-stream processing infrastructure. “The REPM scheme provides the financial bridge required for private players to invest in advanced technologies,” said a critical minerals analyst.
Impact on EV industry and future outlook
Rare earth elements are critical to modern technology, yet India has struggled to compete with global leaders like China in downstream manufacturing. The new initiative aligns with recent policy changes allowing private mining of critical minerals, signalling a broader push for mineral self-reliance.
The facility is expected to reduce costs for EV manufacturers, strengthen supply chains, and generate high-skilled employment. The government is likely to finalise project allocation by late 2026, with potential expansion into other rare earth elements in future phases.
As India targets 30 per cent EV penetration by 2030, domestic production of these magnets will play a key role in improving affordability and supporting the clean energy transition.
