The Centre has reached out to 14 countries, including Japan, Australia, the United Arab Emirates, the United Kingdom and the United States, seeking to attract global participation in its ₹7,280 crore scheme to promote domestic manufacturing of sintered rare earth permanent magnets (REPM).
The ministry of heavy industries has written to embassies and high commissions of these countries, urging them to encourage companies to participate in the scheme. A pre-bid meeting is scheduled for April 7.
Decoupling from China
The outreach is part of India’s broader strategy to reduce dependence on China for critical inputs such as rare-earth magnets, which are essential for sectors including electric vehicles, electronics and renewable energy. The scheme was formulated against the backdrop of global supply disruptions following China’s move last year to restrict rare-earth magnet exports amid escalating trade tensions with the US.
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 worldwide, prompting countries, including India, to diversify sourcing and build domestic capabilities.
Officials said attracting global players would not only help secure alternative supplies but also strengthen supply chain resilience and enable technology transfer.
“If global companies participate, it will help create an alternative supply source for the world beyond China. The aim of reaching out is to attract technology transfer and partnerships with Indian companies, which in turn will ensure assured long-term supply of rare-earth magnets. China’s export restrictions last year have clearly highlighted the need for diversified and reliable supply chains for such critical inputs,” a senior government official said.
Despite having some mining and refining capabilities, India lacks sufficient midstream capacity for manufacturing rare-earth magnets, making domestic industries heavily reliant on imports. The participation of foreign companies is expected to bridge this gap through capital investment and advanced technology transfers.
Under the scheme, companies can bid to set up integrated manufacturing facilities for sintered neodymium-iron-boron (NdFeB) magnets in India. The government is offering a mix of capital subsidies, sales-linked incentives, assured raw material supply and policy support.
Incentives and Infrastructure
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 post-production.
Rare-earth oxides required for production will be supplied by state-run India Rare Earths Ltd (IREL) to the three lowest bidders. India holds rare-earth oxide resources of approximately 8.52 million tonnes. The Union Budget for FY27 also announced dedicated rare-earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu to promote extraction and processing, further supporting domestic manufacturing of magnets.
Bidders can apply for manufacturing capacities ranging from 600 to 1,200 tonnes under the global tender.