New Delhi: The Centre has notified a Rs 7,280 crore incentive scheme aimed at building domestic manufacturing capacity for rare earth permanent magnets. The scheme, announced by the Ministry of Heavy Industries, focuses on the production of sintered neodymium-iron-boron (NdFeB) magnets, which are critical for electric vehicles, renewable energy systems, electronics and defence applications.
Under the policy, manufacturers will be eligible for sales-linked incentives of up to Rs 2,150 per kg. These incentives will be disbursed only after manufacturing units are commissioned, linking government support directly to actual production. The total incentive payout for individual projects will range between Rs 645 crore and Rs 1,290 crore, depending on the scale of capacity established. In addition, the government will provide a capital subsidy of Rs 75 crore to Rs 150 crore to support setting up production facilities.
To qualify, companies must commit a minimum investment of Rs 300 crore to Rs 600 crore, based on proposed capacity. State-run Indian Rare Earths Ltd (IREL) will supply 500 tonnes of NdPr oxide annually to selected firms to ensure raw material availability. The scheme is open to Indian companies, global players and joint ventures, provided the Indian partner holds at least 51% ownership.
Applicants will also need to meet prescribed net worth thresholds, which increase with capacity size. Proposals will be evaluated by a technical committee, with further details to be specified in the request for proposal. The move reflects the government’s effort to strengthen supply chains in strategically important manufacturing segments.
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