India to invite bids for Rs 7,280 crore rare earth magnet manufacturing scheme on March 20

The Ministry of Heavy Industries is likely to call for bids under the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM) Friday. Officials said the Rs 7,280 crore scheme will promote domestic manufacturing of 6,000 million tonnes per annum (MTPA) of magnets, strengthening supply chains for the automotive, defence, and aerospace sectors.

“Request for Proposal (RFP) for REPM manufacturing scheme will be issued on March 20,” a senior official told ET.

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India currently holds the world’s third largest rare earth resources. Calls for harnessing these grew after China curbed the exports of REPM in April 2025, threatening supply chains across industries. To address these concerns, the Union Cabinet approved a scheme to localise permanent manufacturing in the country during November 2025. It aimed to support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys, and alloys to finished magnets.

A key sop under the scheme is the Rs 6450 crore sales-linked incentives for five years along with a Rs 750 crore capital subsidy for setting up REPM manufacturing facilities.

These magnets are vital for electric vehicles, renewable energy, electronics, aerospace, and defence applications. India’s consumption of these permanent magnets is expected to double by 2030 from 2025-levels. The country’s current demand for REPMs is import dependent.

The scheme envisions allocating the total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allotted up to 1,200 MTPA of capacity. The scheme will run for seven years from the date of award, including a two-year gestation period for setting up an integrated REPM manufacturing facility, and five years for incentive disbursement on the sale of magnets.

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According to official estimates, approximately 7.23 million tonne Rare Earth Oxide (REO) equivalent is contained in 13.15 million tonne monazite resource, occurring in the coastal beach and teri / red sand in parts of Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra and Gujarat and in the inland alluvium in parts of Jharkhand, West Bengal and Tamil Nadu.

Another 1.29 million tonne in-situ REO is in hard rock terrains of Ambadungar area, Chhota Udepur district, Gujarat and Bhatikhera and Dantala area, Balotra district, Rajasthan. Around 2,000 tonne of heavy mineral concentrates containing ~2% xenotime (a phosphate mineral of yttrium and heavy rare earth elements) in the riverine placer deposits of Chhattisgarh and Jharkhand.