India’s Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM) has now moved from policy announcement to notified framework. The scheme was notified on 15 December 2025 with a budgetary outlay of ₹7,280 crore to support 6,000 MTPA of integrated sintered NdFeB magnet manufacturing capacity through five beneficiaries. Subsequently, the Ministry of Heavy Industries issued the detailed RFP on 20 March 2026. This article focuses on the scheme architecture and investment implications; for bid mechanics and RFP requirements, see our detailed RFP update here.
In Union Budget 2026 – 27, the policy direction has been reinforced through the announcement of Dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to promote mining, processing, research, and manufacturing.
What is the Scheme to Promote Manufacturing of Sintered REPM?
The notified scheme is a Government of India incentive program under Ministry of Heavy Industries to promote manufacturing of indigenously produced sintered NdFeB REPMs from NdPr oxide, with two supports: sales-linked incentive on magnets sold, and capital subsidy for setting up capacity.
Key design features that investors and existing manufacturers should note:
- Eligible Product and Integration Intent
The scheme is built around sintered NdFeB magnets manufactured from rare earth oxides (NdPr oxide) and explicitly describes the value chain as rare earth oxide to metal, metal to alloy, and alloy to magnet. - Capacity and Beneficiary Structure
Capacity is capped at 6,000 MTPA total and is to be allocated to five beneficiaries via a Global Tender Enquiry (GTE) and RFP. Each beneficiary can bid for 600 to 1,200 MTPA, in multiples of 100 MTPA. - Scheme Duration and Gestation
Total duration is 7 years, including 2 years gestation for setting up facilities and 5 years for incentive disbursement linked to sales. If first sale happens before completion of gestation, that additional period can also be eligible for sales-linked incentive over and above the 5-year duration.
Why has REPM Scheme been Launched now?
The scheme notification explicitly positions REPMs as a strategic input for downstream sectors including electric vehicles, renewable energy, electronics, defence and aerospace.
The notification also clarifies India’s current gap: while upstream capabilities exist in mining, separation and oxide refining, industrial-scale midstream capability (oxide to metal, metal to alloy, alloy to magnet) is a notable missing link, leading to continued import dependence for sintered NdFeB magnets.
A practical driver for policy credibility is the presence and role of IREL (India) Ltd. The notification states that IREL is the only company in India engaged in mining rare earth ores and refining into rare earth oxides, with NdPr oxide production capacity of 400 MTPA and stock of around 500 MT, enabling support for around 1,500 MTPA of REPM at present.
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 600 MTPA to 1,200 MTPA per beneficiary, in multiples of 100 MTPA.
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.
The pathway is now clear and bid-driven.
Selection under the scheme is through a competitive bid process based on technical qualification followed by financial evaluation. The detailed RFP now sets out bid formats, eligibility criteria, DPR requirements, financial-bid rules, and project milestones. Rather than reproducing those mechanics here, investors should review our separate RFP article linked below.
| Item | Position under Scheme |
| Notification Date | 15 December 2025 |
| Total Outlay | ₹7,280 crore |
| Target Manufacturing Capacity | 6,000 MTPA |
| Product Focus | Integrated sintered NdFeB REPM from NdPr oxide |
| No. of Beneficiaries | 5 |
| Capacity per Beneficiary | 600 – 1200 MTPA |
| Support Type | Sales Linked Incentive + Capital Subsidy |
| Selection Approach | Transparent bidding process through GTE / RFP |
| Raw Material Support | Limited assured NdPr oxide supply for 3 lowest bidders |
| Total Scheme Duration | 7 years |
| Gestation Period | 2 years |
| Incentive Disbursement Period | 5 years |
Also Read: REPM Scheme Consultants in India: India Moves from REPM Policy to Competitive Bidding
Criteria for Selection under the Scheme
The document provides the core selection and evaluation mechanics under the scheme are as follows:
What will matter in practice:
- Capacity Band and Credible Integration
The scheme’s evaluation logic is anchored to integrated production capability across intermediate steps, not a narrow magnet finishing play. - Net Worth Thresholds
Minimum net worth is capacity-linked: 600 MTPA requires ₹180 crore, 700/800 requires ₹245 crore, 900/1,000 requires ₹310 crore, 1,100/1,200 requires ₹375 crore. - Financial Competitiveness
Because selection is by “lowest incentive sought” among technically qualified bidders, bid strategy is fundamentally a landed-cost and yield-driven decision. - Raw Material Plan and Risk Ownership
The scheme provides an assured limited supply of NdPr oxide only to L1, L2 and L3, totalling 500 MTPA (200, 167, 133 respectively). L4 and L5 must arrange the entire NdPr oxide requirement on their own.
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 600 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
The detailed RFP will specify formats, but the scheme already indicates what will be verified and how incentives will be claimed, which effectively defines the evidence package you must build.
| Considering entry into REPM manufacturing under India’s notified incentive framework? Before progressing into consortium structuring, technology discussions, capacity bidding, or project execution planning, it is important to evaluate whether the opportunity is commercially viable, technically credible, and scheme-compliant. Hmsa Consultancy assists clients through feasibility studies, detailed project reports, bid support, and strategic advisory tailored to serious investment decisions. Share your requirements with us here. |
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.
