Rare Earth Permanent Magnets (REPM)

The Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPMs) has renewed focus on India’s efforts to establish a domestic permanent-magnet manufacturing ecosystem and reduce dependence on imports, particularly from China. Read here to learn more.

The scheme seeks to create 6,000 MTPA of domestic sintered rare-earth permanent magnet capacity, but experts have highlighted a deeper structural challenge: India’s “visibility gap” in mapping technological capabilities, imports and strategic dependencies across the entire REPM value chain.

The issue is important because rare-earth magnets are critical inputs for electric vehicles, wind turbines, advanced electronics, robotics and other high-technology industries.

What are Rare Earth Permanent Magnets?

Rare Earth Permanent Magnets (REPMs) are high-performance permanent magnets containing rare-earth elements.

Important rare-earth elements associated with permanent magnets include:

• Neodymium (Nd)
• Praseodymium (Pr)
• Dysprosium (Dy)
• Terbium (Tb)
• Samarium (Sm)
• Cobalt (Co) in samarium-cobalt magnets

The most important commercial type for electric mobility is NdFeB (neodymium-iron-boron).

Why are they important?

Compared with conventional ferrite and AlNiCo magnets, REPMs provide:

• High magnetic strength
• High coercivity
• High energy density
• Compact size
• Better performance-to-weight ratio

This makes them particularly valuable where high power needs to be delivered from a small and lightweight motor.

What are Sintered REPMs?

Sintering involves:

• Rare-earth alloy preparation
• Fine powder production
• Compaction under pressure
• High-temperature sintering
• Magnetisation and finishing
• Finished permanent magnet

Sintered NdFeB magnets are particularly important for high-performance motors.

In EVs, permanent magnets can contribute to:

• Traction motors
• Steering systems
• Braking-related systems
• Other high-efficiency motor applications

Thus, the availability of REPMs directly affects the competitiveness of India’s EV and clean-energy manufacturing ecosystem.

What is the REPM Manufacturing Scheme?

The Union Cabinet approved the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets in November 2025.

Key features

Feature	Details
Financial outlay	₹7,280 crore
Target capacity	6,000 MTPA
Beneficiaries	5
Capacity per beneficiary	1,200 MTPA
Selection	Global competitive bidding
Capital subsidy	₹750 crore
Sales-linked incentives	₹6,450 crore
Duration	7 years
Gestation period	2 years
Incentive period	5 years

The scheme aims to establish an integrated domestic chain covering Rare-earth oxide refining, Rare-earth metals, Alloys, and sintered permanent magnets

This is significant because merely possessing rare-earth resources does not create strategic security unless a country can convert those resources into usable industrial products.

Why Does India Need Domestic REPM Manufacturing?

1. Rising demand

India’s demand for REPMs is projected to increase substantially, with the supplied estimates indicating that demand could double by 2030.

The expansion of:

• EVs
• Wind power
• Electronics
• Industrial automation
• Robotics
• Advanced manufacturing

will increase demand for high-performance permanent magnets.

2. Import dependence

• India remains heavily dependent on imported magnets and magnet-containing products.
• According to the supplied data, imports increased from approximately 28,700 tonnes in FY2023-24 to 53,700 tonnes in FY2024-25.
• This highlights the difficulty of estimating India’s true magnet dependence merely from domestic magnet-production statistics.

India’s dependence is visible

The most important conceptual issue is that India’s dependence is not fully visible from conventional trade data.

Imported EV motor

• Contains a permanent magnet
• Permanent magnet contains NdFeB
• Nd/Pr/Dy/Tb are processed in another country
• Rare-earth ore may originate somewhere else

If India records only the import of the motor, the embedded rare-earth dependence can remain hidden.

Therefore, import dependence should be measured not only at the final-product level but across every stage of the value chain.

The complete value chain should be:

• Mining
• Mineral concentration
• Rare-earth separation
• Oxide refining
• Metal production
• Alloy production
• Magnet manufacturing
• Motor manufacturing
• EV / wind turbine / electronic equipment

A weakness at any one stage can create strategic dependence.

Why China’s Role Matters

China occupies a dominant position across major segments of the global rare-earth and permanent-magnet ecosystem.

According to the supplied material, China accounted for approximately 60-90% of India’s permanent-magnet imports during 2022-2025.

Consequently, changes in Chinese export policies can affect Indian industries through:

• Supply disruptions
• Higher input costs
• Production delays
• Inventory shortages
• Uncertainty for EV and automotive manufacturers

This makes REPMs not merely an industrial input but a component of economic and strategic security.

India’s Resource Paradox

India possesses significant rare-earth resources but has not yet translated this resource base into an equivalent downstream manufacturing capability.

The supplied figures indicate approximately:

• 13.15 million tonnes of monazite resources
• Containing about 7.23 million tonnes of Rare Earth Oxides (REOs)
• Distributed across eight states (Odisha, Kerala, Andhra Pradesh, Tamil Nadu, West Bengal, Gujarat, Maharashtra and Jharkhand)

Yet resource availability is not equal to processing capability and manufacturing capability.

This is the central paradox of India’s rare-earth strategy.

The Heavy Rare-Earth Problem

India’s resource base is relatively more favourable for Light Rare Earth Elements (LREEs) such as:

• Cerium
• Lanthanum
• Neodymium

However, high-performance NdFeB magnets also require access to Heavy Rare Earth Elements (HREEs), particularly:

• Dysprosium
• Terbium

Why are Dy and Tb important?

Dysprosium and terbium improve the ability of NdFeB magnets to retain magnetic performance at elevated temperatures.

This is particularly important for EV traction motors and wind turbines where magnets can operate under demanding thermal conditions.

The Monazite-Thorium Challenge

India’s monazite resources are associated with thorium, which has strategic significance for India’s nuclear programme.

This creates a regulatory challenge.

The extraction and processing of monazite therefore involves considerations relating to:

• Radioactive materials
• Atomic-energy regulations
• Safety
• Custody and handling
• Separation of economically valuable rare-earth components

Consequently, India’s resource base cannot simply be treated like an ordinary commercial mineral deposit.

This creates a delicate balance between critical-mineral development and nuclear-security considerations

Major Challenges to India’s REPM Mission

1. Visibility gap

Imports embedded in:

• EV motors
• Wind turbines
• Electronics
• Industrial equipment

can obscure India’s actual dependence.

India therefore needs stage-wise value-chain mapping.

2. Weak geological information

Critical-mineral auctions can struggle when geological information is inadequate.

The supplied material notes that only around 48% of blocks auctioned during 2020-23 were successfully sold.

Insufficient G1/G2-level exploration data can make it difficult for investors to estimate:

• Resource size
• Ore quality
• Extraction costs
• Economic viability

This can result in weak auction participation.

3. Processing bottleneck

• Mining alone cannot create supply-chain security.
• India needs capabilities in ore, concentrate, separated REO, metal, alloy, and magnet
• The greatest strategic value increasingly lies in midstream and downstream processing, rather than simply extracting ore.

4. Heavy rare-earth shortage

• Limited domestic availability of Dy and Tb creates a vulnerability in producing high-temperature-resistant NdFeB magnets.

5. Limited recycling

Large quantities of rare-earth-containing products are eventually discarded.

However, India lacks a sufficiently developed system for:

• Identifying NdFeB-containing waste
• Separating magnets
• Recovering rare earths
• Reusing recovered material

This represents a lost secondary resource.

6. Technology and skill constraints

REPM manufacturing requires capabilities in:

• Advanced metallurgy
• Rare-earth separation
• Alloy production
• Powder processing
• Sintering
• Magnetic characterisation
• Recycling

Building manufacturing capacity therefore requires simultaneous development of technology, skilled manpower and industrial R&D.

India’s Policy Response

1. MMDR Amendment Act, 2023

• The Mines and Minerals (Development and Regulation) Amendment Act, 2023 changed the regulatory treatment of several critical minerals and enabled greater private-sector participation in their exploration and mining.

2. National Critical Minerals Mission

The National Critical Minerals Mission (NCMM), approved in January 2025, seeks to strengthen critical-mineral security through:

• Domestic exploration
• Mining
• Processing
• Recycling
• Overseas asset acquisition

3. Rare Earth Corridors

The Union Budget 2026-27 proposed dedicated rare-earth corridors for:

• Odisha
• Kerala
• Andhra Pradesh
• Tamil Nadu

The objective is to integrate mining, processing, research, and manufacturing within a coordinated ecosystem.

4. Mineral Diplomacy

India is also pursuing overseas critical-mineral partnerships.

Countries mentioned in the supplied material include:

• Australia
• Argentina
• Zambia
• Mozambique

Khanij Bidesh India Limited (KABIL) is an important institutional vehicle for acquiring and developing overseas critical-mineral assets.

What Should India Do?

1. Map the Entire Value Chain

The priority should be creating a national REPM value-chain map.

It should identify:

• Domestic mines
• Processing plants
• Separation facilities
• Refiners
• Alloy producers
• Magnet manufacturers
• Motor manufacturers
• Import sources
• Embedded magnet imports
• Recycling facilities

This would convert the current visibility gap into measurable supply-chain intelligence.

2. Secure Heavy Rare Earth Supplies

India needs a dedicated strategy for Dy and Tb.

Possible measures include:

• Overseas mineral assets
• Long-term offtake agreements
• Strategic stockpiles
• Joint ventures
• Technology partnerships

Overseas procurement should ideally be linked with domestic processing and value addition.

3. De-risk Monazite Processing

• India needs a carefully regulated mechanism that permits greater participation in extracting economically valuable rare-earth components while maintaining strict controls over radioactive materials.

4. Build an Urban-Mining Ecosystem

India should treat end-of-life EVs, motors and electronics as secondary mineral resources.

A circular REPM chain could be:

• Old EV / electronics
• Magnet identification
• Magnet recovery
• Demagnetisation & separation
• Rare-earth recovery
• New magnet production

This can reduce pressure on primary mining.

5. Promote R&D

Greater investment is required in:

• Heavy-rare-earth-efficient magnets
• Reduced-Dy/Tb NdFeB technologies
• Magnet recycling
• Alternative magnet chemistries
• Rare-earth separation technologies
• Magnet manufacturing equipment

The objective should be to move from resource security to technology security.

A Value-Chain Approach to Critical-Mineral Security

• India’s REPM strategy should move beyond the traditional model: Mine, Export/Process, Manufacture towards Explore, Mine, Separate, Refine, Metal, Alloy, Magnet, Motor, Product, Recover, Recycle
• This creates a closed-loop critical-mineral ecosystem.

International Perspective

The REPM issue illustrates the broader geopolitical importance of critical minerals.

Countries increasingly seek to diversify supply chains through:

• Strategic stockpiling
• Overseas mineral assets
• Friend-shoring
• Recycling
• Domestic processing
• Technology partnerships.

For India, the objective should therefore be not complete isolation from global supply chains, but resilience against excessive dependence on a single source.

Way Forward

India’s strategy should rest on five interconnected pillars:

1. Visibility: Map every stage of the REPM ecosystem.
2. Resource Security: Expand domestic exploration and secure overseas supplies.
3. Processing Capability: Develop separation, refining, metallurgy and alloy production.
4. Manufacturing: Build globally competitive magnet and motor industries.
5. Circularity: Recover rare earths from end-of-life EVs, electronics and industrial equipment.

Conclusion

The Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets is an important step towards reducing India’s dependence on imported permanent magnets and strengthening domestic manufacturing.

However, a 6,000 MTPA manufacturing target alone cannot guarantee critical-mineral security.

India’s fundamental challenge lies across the entire chain-from geological exploration and rare-earth separation to heavy rare-earth availability, metal and alloy production, magnet manufacturing and recycling.

The emerging “visibility problem” is therefore as important as the manufacturing deficit. India must know where dependence exists, at which stage it exists, and which capabilities are strategically irreplaceable.