MHI receives 20 bids for rare earth magnet manufacturing scheme

20 bids signal strong industry interest in India's ₹7,280-crore push to build domestic rare earth permanent magnet capacity and reduce import dependence

The Ministry of Heavy Industries (MHI) on Thursday said it received 20 bids from manufacturers seeking to set up integrated rare-earth permanent magnet (REPM) manufacturing facilities in India under the government’s ₹7,280-crore scheme.

 

The MHI opened the technical bids in the presence of bidders, one day after the August 12 submission deadline. The global tender was floated on March 20. The scheme, approved by the Union Cabinet in November 2025, aims to promote domestic manufacturing of sintered REPMs.

 

REPMs are high-performance magnets used in electric vehicles (EVs), wind turbines, consumer electronics, aerospace and defence equipment. They are particularly important in EV motors because they are lightweight and generate strong magnetic fields.

   

The scheme aims to establish 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity in India, “thereby enhancing self-reliance and positioning India as a key player in the global REPM market”, MHI said. Five beneficiaries will be selected through the ongoing global competitive bidding process, with each eligible for up to 1,200 MTPA.

 

The scheme seeks to establish an integrated manufacturing chain, from NdPr oxide — an oxide of neodymium and praseodymium, two rare earth elements used to make permanent magnets — to finished magnets. This is intended to reduce India’s dependence on imports and strengthen domestic supplies.

 

“By building a complete value chain from NdPr oxide to finished magnets in India, the scheme is expected to significantly reduce import dependence in this sector,” MHI said.

 

The scheme will run for seven years from the date of award, including a two-year gestation period to set up the manufacturing facilities and five years during which incentives will be provided on the sale of REPM.

 

The tender deadline was extended three times. The original May 28 deadline was extended to June 29, July 29 and finally August 12.

 

The push to build domestic REPM capacity comes after China’s export controls on rare-earth products in April 2025 disrupted supplies to Indian industries. China introduced licensing requirements for exports of certain rare-earth minerals, including materials used in permanent magnets. The move exposed India’s heavy dependence on Chinese supplies, with China accounting for more than 80 per cent of India’s permanent-magnet imports by quantity in recent years.

 

Indian automakers and component manufacturers warned in May 2025 that delays in obtaining Chinese export approvals could disrupt vehicle production.