The Ministry of Heavy Industries (MHI) on Tuesday notified the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet.
The scheme targets the creation of a domestic manufacturing capacity of 6,000 metric tonnes per annum (MTPA) of sintered Neodymium-Iron-Boron (NdFeB) magnets, a key input for sectors such as electronics, electric vehicles, aerospace and renewable energy. The total capacity will be allocated to five selected applicants through a Global Tender Enquiry.
How is this PLI scheme different?
Unlike earlier production-linked incentive (PLI) programmes that focus on a single metric, the new scheme offers a dual incentive structure. Manufacturers will be eligible for a sales-linked incentive capped at 40 per cent of their net sales turnover, along with a capital subsidy covering 15 per cent of eligible investments. The capital support will apply to expenditure on plant and machinery, research and development, and technology transfer incurred after April 1, 2025.
Sales-linked incentives will be disbursed only after the commissioning of manufacturing capacity and will be capped in the range of ₹645 crore to ₹1,290 crore. The capital subsidy support will be provided in the range of ₹75 crore to ₹150 crore.
The minimum expenditure towards eligible investment under the scheme has been set between ₹300 crore and ₹600 crore.
Supply assurances
Addressing one of the biggest bottlenecks in rare earth manufacturing, access to raw materials, the government has also built in supply assurances. IREL (India) Ltd. will guarantee the supply of 500 MTPA of NdPr oxide to the top three bidders under the scheme. Remaining capacity requirements will need to be met through independent sourcing arrangements.
The scheme will run for a total of seven years, including a two-year period for plant setup followed by five years of sales-linked incentives. Companies or consortiums are eligible to apply, subject to minimum net worth requirements.
A bidder applying for 600 TPA capacity must have a minimum net worth of ₹180 crore. For capacities of 700-800 TPA, the minimum net worth requirement is ₹245 crore, while bidders seeking 900-1,000 TPA capacity must have a net worth of at least ₹310 crore. For applications covering 1,100-1,200 TPA capacity, the minimum net worth requirement is ₹375 crore.