What Happened
- The Ministry of Heavy Industries (MHI) held a pre-bid conference on April 7, 2026 for its ₹7,280 crore scheme to promote domestic manufacturing of sintered rare earth permanent magnets (REPM).
- Major conglomerates including Reliance Industries, Vedanta, and Hindustan Zinc Limited (HZL) participated in the pre-bid consultations.
- The scheme was approved by the Union Cabinet in November 2025 and tenders were released on March 20, 2026, with bids closing on May 28, 2026.
- India currently imports almost all its rare earth permanent magnet requirements; the scheme aims to build an integrated domestic value chain from NdPr oxide to finished magnets.
- A maximum of five entities will be selected, each establishing facilities of up to 1,200 metric tons per annum (MTPA), cumulatively targeting 6,000 MTPA capacity.
Static Topic Bridges
Production Linked Incentive (PLI) Scheme Framework
The PLI scheme is India's flagship industrial policy instrument to boost domestic manufacturing, reduce import dependence, and create large-scale employment. Launched in 2020–21, the PLI covers 14 sectors with a combined outlay of over ₹1.97 lakh crore. Unlike capital subsidies alone, PLI ties incentives to incremental production/sales over a baseline year, encouraging genuine output growth.
- The REPM scheme combines a capital subsidy (₹750 crore) for facility construction with a sales-linked incentive (₹6,450 crore) over 5 years — a hybrid design.
- The total outlay of ₹7,280 crore (~$780 million) makes this one of the larger individual PLI-type schemes.
- Eligible product: sintered neodymium-iron-boron (NdFeB) magnets, the most powerful class of permanent magnets.
Connection to this news: The REPM scheme follows the PLI model to build the rare earth magnet supply chain that is critical for India's EV and clean energy ambitions.
Critical Minerals and China Dependence
Rare earth elements (REEs) — particularly neodymium (Nd) and praseodymium (Pr) used in permanent magnets — are classified as "critical minerals" due to their strategic importance and concentrated global supply. China controls approximately 60–70% of global rare earth mining and over 90% of rare earth magnet manufacturing, creating significant geopolitical supply risk for countries pursuing green energy transitions.
- India's critical minerals list (notified 2023, updated 2024) includes neodymium, praseodymium, dysprosium — all used in REPM manufacturing.
- India has significant rare earth reserves (estimated ~6.9 million tonnes), primarily in Odisha, Andhra Pradesh, Kerala, and Tamil Nadu, but lacks processing capacity.
- The REPM global market is expected to grow rapidly as EV adoption accelerates; India's domestic demand is projected to double by 2030 from 2025 levels.
Connection to this news: By building domestic REPM manufacturing capacity of 6,000 MTPA, India aims to reduce reliance on Chinese imports and secure its clean energy supply chain.
Electric Vehicles and India's Green Transition
India's EV transition (FAME schemes, PM E-Drive scheme) requires a stable supply of rare earth permanent magnets for EV motor drives. Wind turbines also require large quantities of REPMs. Without domestic manufacturing, India's green energy ambitions remain vulnerable to external supply disruptions.
- India's EV sales crossed 1.7 million units in FY 2024–25; the government targets 30% EV penetration by 2030.
- A single EV uses approximately 1–2 kg of rare earth magnets; offshore wind turbines can use 600+ kg per MW.
- The REPM scheme is linked to India's goal of 500 GW renewable energy capacity by 2030.
Connection to this news: The MHI pre-bid consultations mark a concrete step in securing the material inputs needed for India's EV ecosystem and renewable energy ambitions.
Key Facts & Data
- Scheme total outlay: ₹7,280 crore (~$780 million)
- Capital subsidy component: ₹750 crore
- Sales-linked incentive component: ₹6,450 crore (over 5 years)
- Target capacity: 6,000 MTPA of sintered REPM
- Number of selected entities (maximum): 5, each up to 1,200 MTPA
- Pre-bid conference: April 7, 2026; Bid deadline: May 28, 2026
- India's REPM demand projected to double by 2030 vs. 2025
- China controls ~90% of global REPM manufacturing
- India's rare earth reserves: estimated ~6.9 million tonnes