Toward Strategic Autonomy: India’s First Integrated REPM Scheme

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