The Union Cabinet has approved a program to promote the manufacturing of sintered rare earth permanent magnets (REPM) used in electric vehicles and renewable energy, with a financial outlay of ₹72.8 billion (~$815.73 million).

The program aims to set up 6,000 metric tons per annum (MTPA) of integrated REPM  manufacturing in India.

The total financial outlay of the program comprises sales-linked incentives of ₹64.5 billion (~$722.73 million) on REPM sales for five years and a capital subsidy of ₹7.5 billion (~$84.03 million).

The program envisions allocating the total capacity to five beneficiaries through a global competitive bidding process. Each beneficiary will be allotted up to 1,200 MTPA of capacity.

The total duration of the program will be seven years from the date of award, including a two-year gestation period for setting up an integrated REPM manufacturing facility, and five years for incentive disbursement on the sale of REPM.

REPMs are among the strongest permanent magnets and are vital for electric vehicles, renewable energy, electronics, aerospace, and defence applications. The program will support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs.

Driven by rapidly growing demand from electric vehicles, renewable energy, industrial applications, and consumer electronics, India’s consumption of REPMs is expected to double by 2030. At present, India’s demand for REPMs is met primarily by imports.

In September 2025, the Union Cabinet approved a ₹15 billion (~$170.19 million) incentive program to develop India’s recycling capacity for separating and producing critical minerals from secondary sources such as e-waste and lithium-ion battery scrap. This program is a part of the National Critical Mineral Mission, under the Ministry of Mines, which aims to build domestic capacity and supply chain resilience for critical minerals.

The government approved the National Critical Mineral Mission in January this year. This initiative will have an estimated expenditure of ₹163 billion (~$1.88 billion) and an expected investment of ₹180 billion (~$2.07 billion) by public sector undertakings and other entities.