Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets
Why in News?
The Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM) is in the news because the Ministry of Heavy Industries (MHI) held a pre-bid conference on April 7, 2026, for prospective global and domestic bidders.
About
- This marks a critical step in implementing the ₹7,280 crore program following the release of the Request for Proposal (RFP) on March 20, 2026.
- Active Bidding: The bidding window is currently open, with the deadline for submissions set for May 28, 2026.
- Budget Complement: The Union Budget 2026–27 recently announced "Dedicated Rare Earth Corridors" in coastal states to support this manufacturing scheme.
- Import Crisis: India imported over 53,000 tonnes of rare earth magnets in 2024–25 (90% from China), making this domestic push a high priority for national security.
Program Specifications
- Target Capacity: To establish 6,000 Metric Tonnes Per Annum (MTPA) of integrated manufacturing capacity in India.
- Full Value Chain: The scheme covers the entire midstream process—converting Rare Earth Oxides → Metals → Alloys → Finished Sintered Magnets.
Incentive Structure
- Sales-Linked Incentive (SLI): ₹6,450 crore to be disbursed over 5 years based on actual sales.
- Capital Subsidy: ₹750 crore to support the setting up of advanced, integrated facilities.
- Raw Material Support: The first three beneficiaries with the lowest bids receive an assured supply of NdPr oxide from IREL (India) Ltd.
Beneficiary Selection
- Number of Winners: Up to 5 beneficiaries will be selected via global competitive bidding.
- Individual Cap: Each beneficiary is eligible for a capacity of 600 to 1,200 MTPA.
- Selection Method: Uses a transparent Least Cost System (LCS) involving technical and financial evaluation.
Implementation Timeline
- Total Duration: 7 years.
- Gestation Period: First 2 years for setting up the integrated manufacturing plant.
- Incentive Period: Subsequent 5 years linked to production and sales.
Strategic Importance
- Key Sectors: Essential for Electric Vehicle (EV) motors, wind turbines, defence systems, and aerospace.
- Global Position: Aims to break the global monopoly (China currently controls ~90% of production).
- Economic Impact: Aligns with Atmanirbhar Bharat and India's Net Zero 2070 mission by localising clean-energy components.
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