The Ministry of Heavy Industries has notified a new ₹7,280 crore incentive scheme to promote domestic manufacturing of rare earth permanent magnets, a critical input for electric vehicles, wind turbines, electronics and defence equipment, as India looks to reduce its dependence on imports.Under the scheme, manufacturers of sintered NdFeB (neodymium-iron-boron) magnets will be eligible for sales-linked incentives up to ₹2,150 per kg. These incentives will be paid only after companies set up and commission their manufacturing capacity, ensuring benefits are tied to actual production.
The sales-linked payouts will be capped in the range of ₹645 crore to ₹1,290 crore, depending on the scale of the project. In addition, the government has also said that it will offer a capital subsidy of ₹75-₹150 crore to support setting up of manufacturing facilities.
To qualify, companies will need to make a minimum investment of ₹300 crore to ₹600 crore, based on the capacity they plan to build. State-run Indian Rare Earths Ltd (IREL) will supply 500 tonnes of NdPr oxide every year to selected beneficiaries to ensure raw material availability.The scheme is open to Indian firms, global companies or joint ventures, however, the lead partner must hold at least 51% ownership. Applicants will also need to meet minimum net worth requirements, which rise with the size of the capacity being bid for.
600 MTPA capacity: Minimum net worth of ₹180 crore
700 – 800 MTPA capacity: Minimum net worth of ₹245 crore
900 – 1,000 MTPA capacity: Minimum net worth of ₹310 crore
1,100 – 1,200 MTPA capacity: Minimum net worth of ₹375 crore
Companies interested in the scheme will be required to submit a detailed project report, which will be examined by a technical committee. The government said further details, including eligibility conditions and timelines, will be laid out in the request for proposal (RFP).The move is seen as a key step in building domestic capability in a strategically important sector, especially as demand for rare earth magnets rises sharply with India’s push into clean energy, electric mobility and advanced manufacturing.First Published: Dec 17, 2025 12:07 AM IST
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