India approves ₹ 7280 Crore Rare Earth Permanent Magnets (REPM) Scheme

● The Government of India has approved a first of its kind Rs. 7280 crore scheme called the “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM).”

● REPM are one of the strongest types of permanent magnets and are vital for electric vehicle, renewal energy, electronics, aerospace and defence applications.

● This initiative aimed at establishing 6,000 Metric Tons per Annum (MTPA) of integrated REPM manufacturing in India which will support the Atmanirbhar Bharat Abhiyan, Viksit Bharat @2047 initiative and India’s Net Zero 2070 commitment.

● The Scheme will support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys and alloys to finished REPMs.

● The scheme offers Rs. 6450 crore in sales-linked incentives over five years and Rs. 750 crore capital subsidy for manufacturing. Capacity will be given to five beneficiaries through global competitive bidding, each getting up to 1,200 MTPA.

● India has the world’s 5th largest rare earth reserves yet India imports almost all of its rare earth permanent magnets, importing around 53,700 tonnes in the financial year 2024-25. Approximately 93% of these imports come from China, which imposed export restrictions in 2024-25, causing significant disruptions in the supply chain which underscore the urgent need for India to develop secure, domestic manufacturing capabilities for these critical materials.

Rare Earth Permanent Magnets

● Rare earth permanent magnets are strong permanent magnets made from alloys of rare earth elements. They produce much stronger magnetic fields than traditional magnets like ferrite or alnico.

● Due to their high magnetic strength, resistance to demagnetization and durability they are used in electric vehicles, wind turbines, computer hard drives, medical devices like MRI machines, aerospace, defense and consumer electronics.

● These magnets are crucial for applications requiring compact, lightweight and highly efficient magnetic solutions.

● Examples of rare earth permanent magnets include Neodymium magnets (used in electric vehicles), Samarium cobalt magnets (used in aerospace and defense applications) etc.

● Sintering is a process where magnet materials are heated to high temperatures without melting.