India’s new Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM) is a strategic upstream move. Instead of only supporting batteries, fabs or finished EVs, it targets a hard bottleneck in the value chain: high-performance magnets that sit inside EV motors, wind turbines, industrial drives and defense systems.
On 26 November 2025, the Union Cabinet approved this seven-year, ₹7,280 crore programme to build 6,000 metric tonnes per annum (MTPA) of integrated REPM capacity through up to five large projects, selected via global competitive bidding.
What is the Scheme to Promote Manufacturing of Sintered REPM?
The Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM) is a first-of-its-kind industrial incentive programme of the Government of India, anchored by the Ministry of Mines. At its core, the scheme aims to:
- Establish 6,000 MTPA of integrated REPM manufacturing capacity in India.
- Support up to five beneficiaries, each allocated up to 1,200 MTPA, chosen through a global competitive bidding process.
- Provide ₹7,280 crore of support over seven years, of which around ₹6,450 crore will be sales-linked incentives over five years and about ₹750 crore will be capital subsidy for setting up capacity.
A defining feature is its full value chain coverage. Eligible projects must convert rare earth oxides into metals, metals into alloys, and alloys into finished sintered magnets. This is India’s first attempt to build a complete REPM ecosystem rather than merely assemble imported magnets or semi-processed intermediates.
Why has REPM Scheme been Launched now?
Rare earth permanent magnets such as Neodymium-Iron-Boron (NdFeB) and Samarium Cobalt (SmCo) are critical to multiple sectors:
- Traction motors for electric two-wheelers, cars, buses and commercial vehicles
- Wind turbine generators and grid-scale renewable energy systems
- Industrial drives, robotics, factory automation and precision medical equipment
- Defence and aerospace platforms, from guidance and actuation to avionics
Yet India currently imports almost all its finished magnets. Government and media reports indicate that the country imported about 53,748 tonnes of rare earth magnets in the fiscal year ending March 2025, with demand expected to roughly double by 2030, driven mainly by EVs and clean energy.
This dependence is compounded by the fact that global magnet supply is heavily dominated by China, which has recently tightened export controls on rare earth materials and magnet products. These curbs have exposed supply-chain risks for the global auto and renewable sectors, including India.
The REPM scheme has therefore been launched to:
- Reduce import dependence in a highly strategic input.
- Support India’s EV, renewable energy, electronics and defence manufacturing ambitions, including its Net Zero 2070 commitment.
- Build upstream resilience, so that future EV and semiconductor growth is not constrained by vulnerable magnet supply.
Several experts have described the initiative as “as critical as building fabs,” because it addresses the core materials needed by EVs and electronics, not just end products.
How can a company enter the REPM business under this scheme?
The REPM scheme is intended for large, technically and financially capable enterprises rather than small or general-purpose manufacturing units. It is structured as a global competitive bidding programme, not a walk-in subsidy scheme. Participation will therefore be limited to companies that can credibly set up and operate an integrated rare earth permanent magnet facility at industrial scale, covering the complete chain from oxides to finished sintered magnets and aligning with the scheme’s capacity band of up to 1,200 metric tonnes per annum per beneficiary.
The first step for any application is to closely monitor official announcements from the concerned ministries, which will publish the final scheme guidelines and the formal invitation for bids. Until that notification is issued, there is no mechanism to submit an application.
Also Read: How China’s Rare-Earth Magnet Export Ban is Threatening Global Automakers
Criteria for Selection under the Scheme
The document for the selection under the scheme is yet to be released. However, the broad pillars that will matter are as follows:
Evaluation will look at whether the applicant can genuinely execute the full chain – from oxides to metals, metals to alloys, and alloys to high-performance sintered magnets – at industrial scale, not just assemble imported intermediates.
Bids will need to present a realistic plan to set up up to 1,200 MTPA within the two-year gestation period and stabilise production for the incentive period, all within the aggregate national target of 6,000 MTPA.
Given the capital intensity, applicants will be expected to show strong balance sheets or financing plans, and robust project financials demonstrating viability once incentives taper off.
The scheme explicitly encourages use of indigenous technologies where available (for example those supported by the Department of Science and Technology) and allows international collaborations. Applications that can demonstrate reliable access to competitive REPM process technologies and quality systems will be advantaged.
Rare earth processing can have environmental externalities. Bids will need to outline credible plans to meet strict environmental and safety norms, including coordination with specialised regulators linked to atomic energy and hazardous materials, where relevant.
Proposals that clearly embed their magnets into EV, renewable, electronics and defence supply chains, and that strengthen resilience against import shocks, will align more closely with the scheme’s stated objectives.
Documents required for the Application
A generic list of documents that may be required for the application under the REPM Scheme is as follows:
A standard data pack covering incorporation documents, shareholding pattern, promoter and board details, and audited financials for recent years (including net worth and leverage). This establishes basic eligibility and financial strength.
The DPR will be the heart of the application and is likely to include:
- The chosen technology route and process flow from oxides to finished REPMs
- Proposed capacity (up to 1,200 MTPA) and ramp-up profile
- Site selection rationale, land requirement, utility and logistics plan
- Capex and opex estimates, project schedule, organization structure and risk analysis
- Environmental, waste-management and EHS approach, including handling of any hazardous or radioactive by-products
- Existing facilities and track record in magnets, advanced materials or related fields
- Technology licenses or firm MoUs with technology providers
- Collaborations with Indian R&D institutions or global partners in the REPM domain
- Compliance and clearance roadmap
- Environmental and pollution control approvals
- Land-related and local body clearances
- Any sector-specific safety approvals linked to rare earth processing and associated materials
- Scheme-specific undertakings
- The proposed capacity and seven-year timeline (two years for set-up, five for incentive-linked operations)
- Adherence to monitoring, reporting and audit requirements under the scheme
Given that the bidding window has not yet opened and guidelines are still being finalised, serious aspirants have a valuable preparatory period to put these elements in place rather than scrambling once the notification is issued.
How Hmsa can help
If you are an EV OEM, auto component manufacturer, advanced materials company or investor considering entry into REPM manufacturing, Hmsa Consultancy can help you convert this policy opportunity into an investment-grade project. Our support typically spans:
- Translating scheme contours into a clear entry strategy and optimal capacity bid
- Designing an integrated technical and location blueprint, including partner shortlisting
- Preparing a bankable DPR / Project Report and advisory services aligned with both scheme and lender expectations
- Building robust financial models that quantify incentive impact, returns and risk sensitivities
- Structuring and compiling the complete bid package once guidelines are released, and mapping the EHS and regulatory clearance pathway
The objective is to ensure that you do not approach the REPM scheme merely as a subsidy application, but as a commercially viable, technically sound and compliance-ready investment in a strategically critical upstream segment.
Reference: PM India
