Big industrial push on rare‑earth magnets
India’s Ministry of Heavy Industries held a pre‑bid conference for a ₹7,280 crore scheme to build sintered rare‑earth permanent magnet capacity, targeting 6,000 MTPA and attracting bidders like Reliance, Vedanta and L&T. At the same time SEZ reforms now allow 30% DTA sales at concessional duties with 20% value addition — a package of policy moves meant to boost domestic EV and auto supply chains and create advisory demand around localisation, capex modelling and incentives capture. (x.com) (x.com)
On Tuesday, April 7, India’s Ministry of Heavy Industries gathered would-be manufacturers in New Delhi for a pre-bid meeting on a ₹7,280 crore program with a very specific goal: make the magnets that sit inside electric-vehicle motors, wind turbines, electronics, and defense systems, instead of importing them. The government wants up to five winning bidders to build a combined 6,000 metric tons a year of sintered rare-earth permanent magnet capacity, with bids due on May 28 and technical bids opening on May 29. At least 25 companies showed up, including groups such as Vedanta, Hindustan Zinc, JSW, and NLC India, a sign that this is no longer a niche materials story but a full industrial-policy push (moneycontrol.com) (cnbctv18.com). The scheme is aimed at the strongest commercial magnets now used at scale: sintered neodymium-iron-boron magnets, the compact, high-power parts that let a motor stay small while delivering serious torque. India’s cabinet approved the program on November 26, 2025, and structured it to support the whole chain, from converting rare-earth oxides into metal, then metal into alloys, and finally alloys into finished magnets. That matters in practice because importing a finished magnet is very different from knowing how to make one from scratch, and India today largely depends on imports for that finished product (pib.gov.in). The money is split in a telling way. Of the ₹7,280 crore outlay, ₹6,450 crore is not an upfront grant but a sales-linked incentive paid over five years, while ₹750 crore is capital subsidy for building the plants. The government is effectively saying: we will help fund the factory, but most of the support comes only if magnets are actually produced and sold. Each selected company can get capacity of up to 1,200 metric tons a year, and the plants are expected to take about two years to set up before the incentive period fully kicks in (pib.gov.in) (moneycontrol.com). This push lands after a year in which rare-earth magnets stopped looking like obscure industrial inputs and started looking like a strategic vulnerability. India’s government has already acknowledged disruption in rare-earth magnet supplies and tied the issue directly to the auto industry’s concerns. Officials have also been pitching partnerships and joint ventures as a way to build local capacity faster, which helps explain why large diversified groups are circling the bid rather than leaving it to a single specialist materials company (pib.gov.in) (cnbctv18.com). At almost the same moment, another policy lever moved. On April 1, the government opened a one-year relief window for eligible manufacturing units in special economic zones, allowing them to sell goods into India’s domestic market at concessional customs duty rates until March 31, 2027. The units must have begun production on or before March 31, 2025, the goods must show at least 20% value addition inside the zone, and domestic sales under the concession are capped at 30% of the unit’s highest annual export value in any of the previous three financial years (pib.gov.in). Put those two moves together and a pattern appears. One policy tries to create new magnet factories from the ground up. The other tries to make existing export-oriented factories more useful to the domestic market without fully abandoning the export model. For consulting and advisory firms, that opens a very practical lane: bid strategy, plant economics, detailed project reports, customs and incentive structuring, transfer-pricing and value-addition tests, and the harder question every promoter will ask before spending hundreds of crores — whether a localized magnet supply chain can beat imported parts once the subsidy clock starts running (moneycontrol.com) (pib.gov.in). The story, then, is not only about magnets. It is about India trying to pull a tiny but essential component closer to home, and doing it with a mix of procurement rules, customs tweaks, and patient capital support. The first hard deadline in that effort is already fixed: bids for the magnet scheme close on May 28, 2026, on the public procurement portal (moneycontrol.com).
