The government plans to increase the outlay for its rare earth magnet manufacturing scheme to over Rs 5,000 crore, sharply higher than the earlier Rs 1,350 crore.

Annual production targets will be quadrupled from 1,500 MT to about 6,000 MT, aiming to meet rising domestic demand and reduce import dependence. Rare earth permanent magnets are vital for electric vehicles, wind turbines, electronics, and defence.

The revision, suggested by the Prime Minister’s Office, expands incentives from two to at least five manufacturers, each eligible for support on up to 1,200 MT annually. Industry participants in discussions included JSW Group, Mahindra Group, Kalyani Group, Sona Comstar, Midwest Advanced Materials, Entellus, and Proterial.

India holds 6.9 million tonne of rare earth reserves but mined only 2,900 tonne in 2024, while imports reached 53,000 tonne in FY25. IREL (India) remains the sole PSU miner-refiner.

The scheme, to run for seven years, will be open to public and private sector players capable of end-to-end magnet production, with the goal of achieving self-reliance in this strategic sector.