Ministry of Heavy Industries (MHI) notified the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet vide notification S.O. 5800(E) dated 15.12.2025. The scheme has a total budgetary outlay of ₹7,280 crore.

The primary goal of the scheme is to build a complete domestic value chain for converting rare earth oxides (REOs) into sintered NdFeB REPM. By incentivizing the establishment of 6,000 MTPA of domestic integrated manufacturing capacity, India aims to reduce its import dependence for these REPMs, which are critical for strategic sectors like electric vehicles, renewable energy, electronics, defence & aerospace.

• The scheme will allocate up to 6,000 MTPA of capacity to five (5) beneficiaries through a transparent Global Tender Enquiry (GTE).
• The allocation of capacity and incentive shall be carried out through a transparent Least Cost System (LCS) comprising a "two-envelope" system — technical bid and financial bid.
• Each beneficiary will be allocated a minimum of 600 MTPA and a maximum of 1,200 MTPA, in multiples of 100 MTPA.
• Beneficiaries are eligible for two types of financial support:
  • Sales-linked Incentive: Based on quantity of sintered NdFeB REPM sold, capped at ₹2,150 per kg and further limited to 40% of net sales turnover.
  • Capital Subsidy: A reimbursement of 15% on eligible investments made after April 1, 2025, upon full commissioning of the allocated capacity.
• Scheme Tenure: Total duration of 7 years — a 2-year gestation period for setting up facilities + 5 years for incentive disbursement.
• If first sale commences prior to completion of the gestation period, the additional period shall also be eligible for sales-linked incentive over and above the 5-year duration, within overall caps.
• The three lowest bidders (L1, L2, and L3) will receive an assured limited supply of NdPr oxide from IREL (India) Ltd., totalling 500 MTPA.