India’s push to establish a domestic rare earth permanent magnet (REPM) manufacturing ecosystem has attracted strong industry participation, with 20 companies submitting bids under the Centre’s ₹7,280-crore scheme. Among the prominent bidders are Larsen & Toubro (L&T), Coal India, ReNew, Attero Recycling and Lohum Magnets & Energy Solutions.
The Ministry of Heavy Industries opened the technical bids on August 13 following the conclusion of the global tender process. The scheme is designed to promote integrated manufacturing of sintered Neodymium-Iron-Boron (NdFeB) rare earth permanent magnets, which are critical components in electric vehicles, wind turbines, electronics, defence and aerospace applications.
Approved by the Union Cabinet in November 2025, the scheme carries a financial outlay of ₹7,280 crore and targets the creation of 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India. The government plans to select five beneficiaries, with each beneficiary eligible for up to 1,200 MTPA of capacity.
The emphasis on integrated manufacturing is particularly significant. The programme seeks to develop capabilities across the value chain rather than limiting domestic production to the final assembly of magnets. This is aimed at building a more resilient supply chain for materials that have become strategically important across several high-technology industries.
The strong response to the tender comes as India seeks to reduce its dependence on imported rare earth magnets and strengthen domestic manufacturing capabilities. Rare earth magnets offer high magnetic strength in a compact form, making them particularly important for electric motors, wind-turbine generators, advanced electronics and defence systems.
For the automotive industry, developing domestic REPM capacity could become increasingly important as India accelerates electric mobility. Permanent-magnet motors are widely used in high-performance electric powertrains, while the renewable-energy sector also relies on permanent magnets in certain wind-turbine generator technologies.
The participation of companies from diverse sectors also highlights the strategic importance of the opportunity. L&T brings engineering and manufacturing capabilities, Coal India represents the mining and minerals ecosystem, while recycling and magnet-focused companies such as Attero and Lohum offer expertise in recovering and processing critical materials.
The scheme is therefore expected to create capabilities beyond magnet manufacturing alone. Building a competitive REPM industry will require reliable access to rare earth feedstock, refining and alloy-making expertise, specialised manufacturing technology and quality-control capabilities.
The latest bidding response represents an important step in that direction. If the selected beneficiaries successfully establish the targeted capacity, India could gradually develop a domestic supply base for a material that sits at the intersection of clean energy, advanced manufacturing, mobility and strategic industries.
For the broader industrial sector, the initiative signals a shift towards securing critical technology supply chains within India. As global competition for rare earth materials and processing capabilities intensifies, domestic magnet production could become an important component of India’s wider critical-minerals and advanced-manufacturing strategy.
The next stage will be the evaluation of the technical bids and selection of the five beneficiaries. Their subsequent investment and project execution will determine how quickly the proposed 6,000-MTPA REPM ecosystem moves from policy ambition to commercial-scale manufacturing.