Rare earth, Pg2

Key Highlights:

• India imported over 53,000 metric tonnes of rare earth magnets in the fiscal year ending March 2025.
• The government announced a scheme to support integrated Rare Earth Permanent Magnet (REPM) manufacturing facilities.
• The scheme includes sales-linked incentives of Rs 6,450 crore for five years.
• A capital subsidy of Rs 750 crore is allocated for setting up 6,000 MTPA of REPM manufacturing facilities.
• The scheme will run for 7 years, including a 2-year gestation period, from the date of the award.
• The scheme plans to allocate capacity to five beneficiaries through competitive bidding, with each getting up to 1,200 MTPA.

Detailed Insights:

• The scheme aims to boost domestic manufacturing of REPMs by supporting the entire value chain, from oxides to finished magnets.
• This initiative seeks to reduce India's reliance on imports, particularly from countries like China, which dominates the rare earth market.
• The competitive bidding process will ensure efficient allocation of resources and encourage innovation in the REPM manufacturing sector.
• The sales-linked incentives are designed to promote production and sales of domestically manufactured REPMs.
• By establishing integrated manufacturing facilities, the scheme aims to enhance India's capabilities in producing high-value components for various industries.

Key Concepts Involved:

• Rare Earth Elements: A set of seventeen metallic elements with similar properties, crucial for various technological applications.
• Rare Earth Permanent Magnets (REPM): Strong magnets made from alloys of rare earth elements, used in electric vehicles, wind turbines, and electronics.
• Sales-Linked Incentives: Financial benefits provided based on the sales performance of a product, encouraging increased production and market penetration.