India launches capacity-incentive scheme for rare earth permanent magnet manufacturing

Rare Earth Permanent Magnets (REPMs) — most prominently Neodymium-Iron-Boron (NdFeB) sintered magnets — are among the most powerful permanent magnets known and sit at the heart of the clean-energy and advanced-technology transition. They are indispensable in the motors of electric vehicles (EVs), the generators of wind turbines, precision-guided defence systems, aerospace actuators, MRI machines, and consumer electronics. The 'rare earth' elements involved — particularly neodymium (Nd) and praseodymium (Pr), collectively called NdPr — are not geologically scarce but are extraordinarily concentrated in their processing and refining: China controls roughly 85–90% of global rare earth processing capacity, giving it decisive leverage over the entire downstream magnet supply chain. This concentration has been a persistent strategic concern for the United States, the European Union, Japan, and increasingly India, all of which have identified REPMs as a critical-mineral vulnerability.

India's own rare earth reserves are significant — the country holds some of the world's largest deposits of monazite, a rare-earth-bearing mineral managed by the Department of Atomic Energy under the Atomic Minerals Directorate. However, domestic processing and downstream manufacturing have historically lagged far behind extraction potential. India has imported finished REPMs and REPM-based components, creating a structural dependency that undermines both its EV ambitions and its defence indigenisation goals. The Ministry of Heavy Industries (MHI) has been tasked with bridging this gap through a dedicated manufacturing incentive scheme, analogous in architecture to the Production Linked Incentive (PLI) scheme framework but structured around capacity creation rather than incremental output.