Will India's rare earth scheme enhance supply chain resilience and semiconductor growth?
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Synopsis
India is on the verge of a transformative leap in its semiconductor landscape! The newly announced ₹7,280 crore scheme for Sintered Rare Earth Permanent Magnets promises to enhance supply chain stability and reduce import dependence, setting the stage for exponential growth in demand by 2030. Could this be the key to India's tech future?
Key Takeaways
- ₹7,280 crore investment in rare earth permanent magnets.
- Goal to cut import dependence and enhance supply chain resilience.
- Projected doubling of demand by 2030.
- Initiative supports India's semiconductor manufacturing ambitions.
- Establishing a capacity of 6,000 metric tons per annum.
New Delhi, Nov 28 (NationPress) The India Electronics and Semiconductor Association (IESA) announced on Friday that the government's ₹7,280 crore initiative for Sintered Rare Earth Permanent Magnets (REPM) aims to bolster the nation's supply chain resilience, reduce reliance on imports, and cater to a demand projected to double by 2030.
The industry body described this scheme as a groundbreaking, first-of-its-kind effort that addresses a pivotal gap in India’s high-tech value chain.
IESA emphasized that this initiative will serve as a catalyst for India's larger semiconductor manufacturing ambitions by ensuring secure access to essential materials.
“The combination of sales-linked incentives and capital subsidies will render large-scale REPM production globally competitive and attract prestigious global and Indian firms,” remarked Ashok Chandak, President of the India Electronics & Semiconductor Association (IESA).
The program seeks to create the country’s first integrated manufacturing ecosystem encompassing oxides, metals, alloys, and finished magnets, as noted in the announcement.
Rare earth permanent magnets are essential components for electric vehicles, renewable energy systems, aerospace, defense, consumer electronics, and the semiconductor manufacturing ecosystem.
For the semiconductor and ESDM sectors, the availability of REPM is vital for precision motors, automation systems, fab equipment, power electronics, EV traction systems, and 5G/AI hardware.
Moreover, this scheme highlights India’s capacity to develop strategic solutions and serve as a deterrent against coercive tactics from other nations. Indian manufacturing will no longer face risks of line stoppages due to external supply chain disruptions.
This initiative positions India as an alternative hub in the global rare-earth magnet supply chain, particularly as industries worldwide seek diversified and reliable sources.
It aims to establish a manufacturing capacity of 6,000 metric tons per annum for integrated REPM production.
The framework includes sales-linked incentives totaling ₹6,450 crore for REPM sales over five years, alongside a capital subsidy of ₹750 crore for establishing manufacturing capacity.
Point of View
It's clear that India's new initiative on rare earth magnets is a significant step towards enhancing our technological self-reliance. By establishing a robust supply chain within the country, India can mitigate risks associated with global dependencies. This move not only reinforces India's manufacturing capabilities but also highlights our commitment to becoming a leader in the semiconductor sector. We must continue to support such initiatives that align with our national interests.
NationPress
28/11/2025
Frequently Asked Questions
What is the primary goal of India’s ₹7,280 crore scheme?
The main objective is to strengthen supply chain resilience, reduce import dependence, and support the anticipated doubling of demand for rare earth magnets by 2030.
How will the scheme affect the semiconductor industry?
It will ensure secure access to strategic materials essential for semiconductor manufacturing, thus acting as a force multiplier for India's semiconductor ambitions.
What kind of financial incentives does the scheme provide?
The scheme includes sales-linked incentives of ₹6,450 crore for REPM sales over five years and a capital subsidy of ₹750 crore for manufacturing capacity establishment.
How much REPM manufacturing capacity is expected to be established?
The scheme aims to create an integrated manufacturing capacity of 6,000 metric tons per annum for rare earth permanent magnets in India.
What industries will benefit from rare earth permanent magnets?
Key sectors include electric vehicles, renewable energy systems, aerospace, defense, consumer electronics, and the semiconductor manufacturing ecosystem.
