- Why in news
- On 20 March 2026 the Ministry of Heavy Industries released the Request for Proposal inviting global bids to set up sintered rare earth permanent magnet plants of 6,000 MTPA total capacity. Bids are due on 28 May 2026.
- What it is
- The Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet is a Ministry of Heavy Industries scheme approved by the Union Cabinet in November 2025. It supports integrated NdFeB magnet plants, from NdPr oxide to finished magnets, using a capital subsidy and sales-linked incentives. It aims to cut India's import dependence for magnets used in EVs, wind turbines, electronics and defence.
- Outlay and approval
- The Union Cabinet approved the scheme on 26 November 2025 with an outlay of Rs 7,280 crore.
- Incentive structure
- The scheme gives a capital subsidy of Rs 750 crore and sales-linked incentives of Rs 6,450 crore. The three lowest bidders get limited assured supply of NdPr oxide from IREL (India) Ltd.
- Selection method
- Beneficiaries are chosen online through a two-stage Least Cost System (technical and financial bid) on the CPP Portal.
- Outlay
- Total outlay is Rs 7,280 crore: Rs 6,450 crore as sales-linked incentives and Rs 750 crore as capital subsidy.
- Capacity
- The scheme targets an aggregate 6,000 metric tonnes per annum of magnet manufacturing capacity.
- Duration
- The scheme runs 7 years from the date of award: a 2-year gestation period to build integrated facilities, then 5 years of incentive payment on sales.
- Notification and selection
- The scheme was notified on 15 December 2025. Beneficiaries are chosen through a bidding process, and the RfP is being finalised.
- Administering ministry
- The Ministry of Heavy Industries runs the scheme. The Cabinet approved it in November 2025.
Don’t confuse with Sintered NdFeB magnets vs NdPr oxide: NdPr oxide is the rare earth input, supplied in limited quantity by IREL. Sintered NdFeB magnets are the finished product the scheme supports.
Don’t confuse with Capital subsidy vs sales-linked incentive: The capital subsidy (Rs 750 crore) supports setting up plants. The sales-linked incentive (Rs 6,450 crore) is paid against magnet sales and forms most of the outlay.
Don’t confuse with Sintered NdFeB magnets vs rare earth oxides: The scheme supports making finished magnets from NdPr oxide in integrated plants. It does not support mining or oxide production alone.
Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.
Why it matters
- Reduces import dependence for magnets used in EVs, wind turbines, electronics, aerospace and defence.
- Builds a full domestic value chain from NdPr oxide to finished magnets, supporting critical mineral security.
- Cuts import dependence for magnets used in EVs, wind power, electronics and defence.
- Builds a domestic value chain in critical minerals and supports self-reliance goals.
Problems
- Raw material supply is limited, as assured NdPr oxide is available only to the three lowest bidders.
- Plants must compete with established global producers on cost and technology.
- Raw material supply: India needs assured NdPr oxide and heavy rare earths, and processing technology is concentrated in a few countries.
- Competing with established global producers on cost and scale.
Way forward
- Secure rare earth oxide supply through domestic mining and overseas partnerships.
- Pair incentives with technology access and recycling of magnets.
- Link the scheme with domestic rare earth mining and processing, and with overseas mineral partnerships.
- Support recycling and technology development to secure supply.
Put in your answer
Scheme outlay: Rs 7,280 crore for 6,000 MTPA of magnet capacity, with sales-linked incentives forming most of the outlay.
- 2025Mains GS3 · Q12Rationale, achievements, and improvements of Production Linked Incentive scheme
- 2025Mains GS3 · Q16Challenges facing semiconductor industry; features of India Semiconductor Mission
- 2019Mains GS1 · Q6Can regional resource-based manufacturing help promote employment in India?
- 2023Mains GS3 · Q1Policies to raise manufacturing share in GDP, particularly MSMEs
- 2026Prelims Q95Statements on rare earth elements, critical minerals and India's NCMM
- 2025Prelims Q6Statements on India's critical minerals: MSP membership, resources, MMDR amendment
- 2021Prelims Q56Which statements on seabed mining licences and rare earth minerals in international waters are correct?
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Lasting scheme with a tender stage. Scheme questions are 52 of 327 Prelims items, but the release has few testable facts beyond capacity and dates.
Worth revising until Prelims 2027: most news questions come within two years of the event.