Meity for inclusion of rare-earth magnet recycling in PLI scheme

The IT ministry has urged the heavy industries ministry to expand the proposed PLI scheme for rare earth permanent magnets to promote recycling, citing India's growing e-waste challenge

The Ministry of Electronics and Information Technology (Meity) has suggested to the Ministry of Heavy Industries (MHI) that the proposed production-linked incentive (PLI) scheme for boosting rare earth permanent magnet (REPM) manufacturing in India should also encourage the recycling of spent magnets, as the country is already among the world’s top three generators of electronic waste (e-waste), multiple sources aware of the development told Business Standard.

 

Senior government officials said although most domestic mobile manufacturing companies used recycled REPM for their units, there was some impact on companies producing hearables and wearables in India. 

“The hearable and wearable companies had also managed to secure alternative supply lines from various companies, both in China and other countries. So, the overall impact was minimal,” a senior government official said.

 

According to the Global E-waste Monitor 2022 report by the International Telecommunication Union (ITU) — a United Nations (UN) agency — and its partner organisations, India generated about 4.17 million tonnes (mt) of e-waste in 2022. 

This makes India the world’s third-largest producer of e-waste, senior government officials said. With the country targeting carbon neutrality by 2070 and accelerating its shift towards electric mobility, a “huge” amount of e-waste, including spent REPMs, is expected in the coming years, Meity has cautioned. 

In view of this, Meity had recommended that the MHI expand the proposed PLI scheme to also promote the “recycling” of spent magnets alongside domestic manufacturing. 

“The inclusion of the recycling component (in the PLI scheme) would have helped give the industry a formal structure under the scheme,” another official said. 

The PLI scheme for boosting domestic REPM proposes financial incentives, including capital subsidies and sales-based incentives, for winning bidders (private players), who will establish five manufacturing plants with a combined REPM production capacity of 6,000 tonnes per year. The MHI is the nodal ministry for the scheme that is currently under intense inter-ministerial discussions.

 

However, the MHI suggested to Meity that the focus of the scheme was limited to promoting domestic REPM manufacturing. Recycling of magnets or critical minerals is a subject for the Ministry of Mines, the MHI has told Meity. Both the MHI and Meity did not respond to Business Standard’s queries until press time. 

Since April this year, China has restricted the export of REPMs to India, which has affected production in the Indian automobile industry. REPMs are used in various auto components, especially in traction motors for electric vehicles (EVs). Almost 90 per cent of global REPM production takes place in China.

 

“Electronics production reached $138 billion in 2024-25, with mobile phones contributing $64 billion. New frontiers such as semiconductors, advanced packaging, EVs, digital infrastructure, and defence electronics are poised for scale. These sectors require reliable supplies of rare earths, lithium, cobalt, nickel, tungsten, tantalum, and gallium, among others. Any delay or disruption can derail national objectives,” said electronics industry body India Cellular & Electronics Association (ICEA) in a July 2025 report. 

Waste to wonder

• India is the third-largest producer of e-waste (4.17 million tonnes in 2022)
• Recycling would ensure steady domestic rare-earth permanent magnet (REPM) supply and cut import dependence
• MHI disagrees, saying recycling falls under the Ministry of Mines
• The PLI proposes five REPM plants of 6,000 mt per year capacity 
• China’s export curbs since April 2025 have hit Indian EV and auto output
• ICEA warns REPM shortages could affect EVs, semiconductors, defence electronics