Centre extends bid submissions to June 29 for EV Magnet Manufacturing Scheme

The Centre extended the bid submission deadline to June 29, 2026, for the Rare Earth Permanent Magnet (REPM) Manufacturing Scheme — India's first structured ...

What Happened

The Centre extended the bid submission deadline to June 29, 2026, for the Rare Earth Permanent Magnet (REPM) Manufacturing Scheme — India's first structured programme to build domestic production capacity for high-performance sintered magnets used in electric vehicle (EV) motors.
The scheme, approved by the Union Cabinet in November 2025, carries a total financial outlay of ₹7,280 crore, comprising a capital subsidy of ₹750 crore and sales-linked incentives of ₹6,450 crore.
The target is to build a combined domestic manufacturing capacity of 6,000 metric tonnes per annum (MTPA) of sintered Rare Earth Permanent Magnets (REPMs).
The tender was originally released on March 20, 2026; the deadline extension to June 29 signals the government's intent to attract both domestic and global bidders for what is a capital-intensive, technically complex sector.
India currently imports nearly 100% of its rare earth permanent magnets (approximately 900 tonnes annually in 2024–25), almost entirely from China — a single-source dependence that the scheme is designed to eliminate.

Static Topic Bridges

Rare Earth Permanent Magnets — Technology and Strategic Importance

Rare Earth Permanent Magnets (REPMs) — primarily Neodymium-Iron-Boron (NdFeB) sintered magnets — are indispensable components in permanent magnet synchronous motors (PMSMs), which power most modern electric vehicles. They are also critical for wind turbine generators, defence electronics, aerospace actuators, and consumer electronics. NdFeB magnets offer the highest energy density of any permanent magnet material, enabling compact, high-torque, energy-efficient motors. The manufacturing process for sintered NdFeB magnets involves over 100 complex and environmentally challenging steps — from rare earth ore processing to alloying, sintering, and surface coating — creating significant barriers to entry.

Primary magnet type: Sintered NdFeB (Neodymium-Iron-Boron)
Key rare earth elements used: Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy), Terbium (Tb)
Applications: EV motors, wind turbines, defence electronics, aerospace, consumer electronics
India's current import: ~900 tonnes/year (2024–25), nearly 100% from China
Manufacturing complexity: 100+ process steps; China dominates due to decade-long technology investment

Connection to this news: The scheme targets the magnet manufacturing step specifically — not upstream mining — which is India's most acute bottleneck and where China's dominance is most pronounced.

China's Dominance in Rare Earth Supply Chain

China controls approximately 60–70% of global rare earth mining, 85–90% of separation and refining capacity, and over 90% of global NdFeB magnet manufacturing. This near-monopoly is the result of deliberate state investment since the 1990s in processing technology, combined with lower environmental compliance costs and economies of scale. In 2025, China imposed export controls on several rare earth elements and related technology — a strategic lever that directly threatened supply chains for EV manufacturers, defence contractors, and electronics producers globally. India's dependence on Chinese magnets makes its EV transition and defence modernisation plans structurally vulnerable.

China's share: ~60–70% mining; ~85–90% processing; ~90%+ magnet manufacturing
2025: China imposed export restrictions on rare earth elements and processing technology
Global rare earth reserves: China holds ~36%; India holds ~6% (5th/6th largest globally)
India's rare earth deposits: monazite sands in Odisha, Kerala, Tamil Nadu, Andhra Pradesh, Gujarat, Maharashtra
India's 2024–25 magnet imports: over 53,000 metric tonnes of REE magnets (total RE magnet volume including non-sintered)

Connection to this news: The bid extension is partly to attract non-Chinese global players (South Korean, Japanese, European firms) who have rare earth magnet technology, as India seeks to diversify its magnet supply chain away from Chinese dependence.

India's Critical Minerals Strategy

India's rare earth magnet scheme is embedded in a broader critical minerals strategy. The National Critical Mineral Mission (NCMM), approved in April 2025, targets 30 critical minerals including neodymium, cobalt, lithium, and graphite. KABIL (Khanij Bidesh India Limited) — a joint venture of NALCO, HCL (Hindustan Copper Limited), and MECL (Mineral Exploration Corporation Limited) — was established to acquire overseas mineral assets in countries like Australia, Argentina, Chile, and African nations. India has the 5th or 6th largest global rare earth reserves (approximately 6.9 million tonnes) but contributes only ~0.25% to global production, ranking 7th — a gap that reflects the investment deficit in processing and downstream manufacturing.

National Critical Mineral Mission (NCMM): approved April 2025; targets 30 minerals including Nd, Co, Li
KABIL: joint venture of NALCO + HCL + MECL; established to acquire overseas mineral assets
India's reserves: ~6.9 million tonnes of rare earths (5th–6th globally); primarily in monazite sands
India's 2024 production: ~2,900 tonnes (vs. China's 255,000 tonnes)
Target under scheme: 6,000 MTPA magnet manufacturing capacity domestically
NCMM also includes: 1,200 domestic exploration projects by 2031; acquisition of 50 overseas mineral assets

Connection to this news: The EV Magnet Manufacturing Scheme operationalises the downstream manufacturing pillar of the NCMM — without domestic magnet plants, India's rare earth reserves remain strategically inert.

Production-Linked Incentive (PLI) Scheme Architecture

The Rare Earth Magnet Manufacturing Scheme follows the PLI (Production-Linked Incentive) model — a supply-side industrial policy instrument where the government disburses incentives as a percentage of incremental sales above a base year, rather than upfront capital grants. The PLI approach was designed to avoid fiscal waste on capacity that does not produce, by linking payouts to verified commercial output. The Ministry of Heavy Industries, which oversees this scheme, has used PLI frameworks for automobiles, auto components, advanced chemistry cells (batteries), and now magnets — building an integrated EV supply chain domestically.

PLI model: incentives paid on incremental sales above a base year threshold
Implementing ministry: Ministry of Heavy Industries
Scheme structure: ₹750 crore capital subsidy + ₹6,450 crore sales-linked incentives = ₹7,280 crore total
Duration: multi-year (typically 5–7 years under PLI schemes)
Other EV-related PLI schemes: PLI for Advanced Chemistry Cells (₹18,100 crore), PLI for Automobile and Auto Components (₹25,938 crore)
Eligibility: open globally — domestic and foreign firms may bid

Connection to this news: The bid deadline extension to June 29 gives more time for technically capable international bidders (e.g., Japanese firms like TDK, Shin-Etsu; South Korean firms) to prepare detailed financial-technical proposals — indicating the government's priority of quality over speed.

Key Facts & Data

Scheme outlay: ₹7,280 crore (₹750 crore capital subsidy + ₹6,450 crore sales-linked incentives)
Target capacity: 6,000 metric tonnes per annum (MTPA) of sintered REPMs
Implementing ministry: Ministry of Heavy Industries
Bid deadline extended to: June 29, 2026 (original: May 28, 2026)
India's current magnet imports: ~900 tonnes/year sintered NdFeB; nearly 100% from China
China's share of global NdFeB magnet manufacturing: 90%+
India's rare earth reserves: ~6.9 million tonnes (5th–6th globally)
National Critical Mineral Mission (NCMM): approved April 2025
KABIL: NALCO + HCL + MECL joint venture for overseas mineral asset acquisition
Key rare earth elements in NdFeB magnets: Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy), Terbium (Tb)
India aims to begin domestic rare earth permanent magnet production before end of 2026