The Ministry of Heavy Industries (MHI) has extended the bid submission deadline for its ₹7,280-crore Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM) by one month after multiple stakeholders sought additional time to prepare bids, underscoring the complexity of developing one of India’s most technologically demanding manufacturing ecosystems.
Bids, originally due on June 29, can now be submitted until July 29, while technical bids will be opened on July 30 instead of June 30, according to an notification issued by the ministry on Wednesday. The ministry said the extension was intended to facilitate wider participation in the global tender.
This marks the second extension granted under the scheme.
Industry stakeholders had earlier raised concerns during an April pre-bid meeting over key provisions of the Centre’s ₹7,280-crore programme to promote domestic manufacturing of sintered rare earth permanent magnets, particularly regarding limited raw material allocation and incentive criteria linked to magnet weight rather than quality.
The concerns were voiced during the meeting attended by around 23 participants, including Reliance Industries, Larsen & Toubro (L&T), Sona Comstar, Proterial, Vedanta, and Tata AutoComp, among others.
Raw Material Chokepoints
According to several participants, one of the key issues is the restricted allocation of processed raw materials. Under the scheme, state-run IREL (India) Ltd will allocate a total of 500 metric tonnes per annum (MTPA) of neodymium-praseodymium (NdPr) oxide to only three selected beneficiaries.
However, the scheme allows for the selection of up to five beneficiaries, raising concerns among prospective bidders over long-term access to critical raw materials.
Geopolitical Gridlock
The extension comes amid the Centre’s broader push to reduce dependence on China for critical inputs such as rare-earth magnets, which are essential for sectors including electric vehicles, electronics, defence, and renewable energy.
The scheme was formulated against the backdrop of global supply disruptions following China’s move last year to tighten export controls on rare-earth magnets amid escalating trade tensions with the United States.
China currently accounts for nearly 60% of global rare-earth mining and about 90% of processing capacity, giving it a dominant position in the supply chain. Recent restrictions have exposed vulnerabilities across global industries, prompting countries, including India, to diversify sourcing and build domestic capabilities.
The scheme provides a capital subsidy of ₹750 crore for setting up five processing units, along with ₹6,450 crore in sales-linked incentives to be disbursed after production begins.
Rare-earth oxides required for manufacturing will be supplied by IREL to the three lowest bidders. India holds rare-earth oxide resources of around 8.52 million tonnes (0.852 crore tonnes). The Union Budget for FY27 also announced dedicated rare-earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu to support extraction, processing and downstream magnet manufacturing.
Under the global tender, bidders can apply for manufacturing capacities ranging from 600 tonnes to 1,200 tonnes per annum.