India's Bid to Manufacture Rare Earth Magnets Locally

The Ministry of Heavy Industries has issued a global call for bids to establish manufacturing facilities for sintered rare earth permanent magnets in India. This move is part of a government scheme aimed at enhancing domestic production. The plan includes setting up NdFeB-based REPM units with a cumulative capacity of 6,000 metric tonnes per annum, according to an official statement.

The ministry's release detailed, "Prospective applicants are invited to submit bids for integrated NdFeB REPM manufacturing facilities in India, with eligibility for capital subsidy and sales-linked incentives." These incentives comprise a capital subsidy of Rs 750 crore and sales-linked benefits totaling Rs 6,450 crore. Each successful bidder will be allocated a production capacity range of 600 to 1,200 metric tonnes annually.

Rare earth permanent magnets are vital in sectors such as electric vehicles, wind energy, electronics, and defense. The initiative seeks to build a comprehensive domestic value chain, from raw materials (NdPr oxide) to finished magnets, to curb India's reliance on imports. The bidding will feature an online, transparent Least Cost System (LCS) with a two-stage process: Technical Bid and Financial Bid, facilitated through the Central Public Procurement Portal.

The tender documents have been available since March 20, 2026, with a bid submission deadline of May 28, 2026. Technical bids are scheduled to open on May 29, 2026. The scheme also assures an NdPr oxide supply through IREL (India) Ltd. for specific bidders, guaranteeing raw material availability for domestic manufacturers.

Data from the Ministry of Mines indicates heavy dependence on imports in India's rare earth market, primarily sourced from China. The Indian government, responding to recent Chinese export restrictions, has initiated the National Critical Mineral Mission to diversify supply sources. A Crisil report from April 2025 highlights China's export restrictions on rare earth elements, necessitating export licenses and leading to approval delays. India, which imported over 80% of its 540-tonne magnet requirements from China last year, felt the supply chain impact significantly, as per Crisil's findings. (ANI)