India is gearing up to invite bids for establishing domestic manufacturing units for rare earth permanent magnets (REPMs) under a Rs 72.8 billion incentive scheme approved in November 2025. The initiative is aimed at developing an annual production capacity of 6,000 metric tonnes of integrated REPMs, essential for electric vehicles, renewable energy systems, aerospace, defence and high-end electronics.

Draft guidelines for the scheme will be released shortly for public feedback, while pre-bid consultations have already begun. The government expects to launch the tender process before the end of January 2026.

The Department of Science and Technology has developed indigenous technology for producing permanent magnets. To ensure steady access to raw materials, India is in discussions with suppliers across South America, Africa, the UK and Australia to secure long-term supplies of rare earth oxides. Each tonne of rare earth oxide can produce nearly three tonnes of permanent magnets, making reliable sourcing vital to the scheme’s success.

The initiative also responds to recent export restrictions imposed by China, which disrupted India’s magnet supply chain. Although China has conditionally resumed exports, India is seeking to reduce dependence on a single supplier and strengthen supply chain resilience.

By fostering domestic production and supporting technology development, the Rs 72.8 billion scheme marks a strategic step toward self-reliance in a sector critical to the country’s industrial and defence capabilities.