Brief Context
Context The Union Cabinet chaired by Prime Minister Narendra Modi has approved the “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets” with a financial outlay of ₹7,280 crore. About the Scheme This first-of-its-kind initiative aims to establish 6,000 Metric Tons per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing capacity in India. REPMs—such as Neodymium-Iron-Boron (NdFeB) and Samarium Cobalt (SmCo)—are among the strongest permanent magnets in
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Syllabus: GS2/Governance; GS3/ Science
Context
- The Union Cabinet chaired by Prime Minister Narendra Modi has approved the “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets” with a financial outlay of ₹7,280 crore.
About the Scheme
- This first-of-its-kind initiative aims to establish 6,000 Metric Tons per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing capacity in India.
- REPMs—such as Neodymium-Iron-Boron (NdFeB) and Samarium Cobalt (SmCo)—are among the strongest permanent magnets in the world.
- Capacity will be allocated to five beneficiaries through a global competitive bidding process, each receiving up to 1,200 MTPA.
- 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.
- Duration of scheme: 7 years
- 2 years: Gestation period
- 5 years: Incentive disbursement
Why Does India Need This?
- Rising Demand: REPMs are critical for industries such as: electric vehicles, renewable energy, electronics & smartphones, aerospace and defence and strategic systems. India’s demand for REPMs is projected to double by 2030.
- Heavy Import Dependence: India currently imports nearly all of its ~900 tonnes annual REPM requirement.
- Global supply shortages (2021–22) caused price spikes of 200–300%, exposing India’s vulnerability.
- Strategic Autonomy: REPMs are classified as Critical Materials globally. Securing REPM production aligns with:
- Atmanirbhar Bharat
- National Security Strategy
- Net Zero 2070
- Viksit Bharat @2047
- Mineral Potential: India has the world’s 5th-largest rare earth reserves (~6.9 million tonnes), primarily located in Andhra Pradesh, Odisha, Kerala, Jharkhand and Rajasthan.
Challenges
- Technological Complexity: NdFeB and SmCo magnet production involves ultra-high vacuum sintering and cryogenic milling.
- India lacks trained metallurgists and engineers specializing in rare earth magnet technologies.
- China’s Dominance: China controls ~85–90% of global REPM production, making competition difficult.
- High Capital Costs: Integrated REPM facilities require high-temperature furnaces, rare earth purification units and powder metallurgy lines.
- Environmental and Regulatory Issues: Wastewater from rare earth processing contains radioactive thorium and heavy metals.
Steps Taken by India
- National Critical Mineral Mission (NCMM): Launched in 2025, to establish a robust framework for self-reliance in the critical mineral sector.
- Under this mission, the Geological Survey of India (GSI) has been tasked with conducting 1,200 exploration projects from 2024-25 to 2030-31.
- Strengthening Domestic Capacity: IREL (India) Limited, under the Department of Atomic Energy, is modernising processing facilities.
- Department of Atomic Energy (DAE) developing rare earth metal reduction & alloying technologies.
- International Partnerships: MoUs with Australia, U.S., Europe, and Japan on critical mineral supply and technology sharing.
- India joined the Minerals Security Partnership (MSP) in 2023.
- Demand-Side Drivers: Production Linked Incentive (PLI) scheme for solar modules, electronics, drones, auto & EV components.
- The EV mission alone could require 15,000–20,000 tonnes of REPMs annually by 2047.
- Research & Innovation: BARC, ARCI, and IITs advancing — high-performance magnet research, recyclable magnets and waste-free extraction technologies.
Conclusion
- This initiative marks a transformational step toward building a self-reliant and competitive REPM ecosystem in India.
- By fostering indigenous manufacturing, it will secure critical supply chains, support electric mobility and renewable energy, and strengthen national defence capabilities.
- The scheme contributes to India’s Net Zero 2070 goals, reduces import dependence, and aligns with the broader vision of Viksit Bharat @2047—creating a technologically advanced, globally competitive, and sustainable industrial base.
Source: PIB