India clears Rs 7,280 crore rare earths scheme amid China’s export curbs

The Union Cabinet has approved a new initiative to scale up manufacturing of sintered rare earth permanent magnets (REPMs), a key component across electric vehicles (EVs), renewable energy and defence. The decision comes at a time when China’s tighter export norms on rare earth magnet materials are set to heighten supply challenges for Indian industries. The government has cleared a financial outlay of Rs 7,280 crore to set up 6,000 metric tonnes per year of fully integrated REPM manufacturing capacity in India. This will include the entire process—from converting rare earth oxides into metals, turning metals into alloys, and finally producing finished magnets.
At present, almost all of India’s REPM needs are met through imports. With demand expected to double by 2030, the new initiative aims to secure supplies and develop a strong domestic ecosystem.
According to Raju Kumar, Partner and Energy Tax Leader, EY India, “The announcement of incentives for rare-earth magnets, along with allocations in National Critical Minerals Mission, signal a broader national commitment to building a secure, competitive critical-minerals ecosystem. The proposed support for magnet manufacturing, a segment where India has historically depended on global supply chains, can unlock new opportunities across mining, processing, alloying and advanced materials. It creates headroom for Indian companies to participate in high-value applications spanning electric mobility, renewables, electronics and defence.”