**Policy Summary: Promoting Domestic Production of Rare Earth Magnets in India**
This policy addresses the promotion of domestic production of rare earth magnets, crucial for electric vehicles (EVs), electronics, and defense manufacturing, as outlined in Lok Sabha Unstarred Question No. 1474, answered on July 29, 2025, by the Ministry of Heavy Industries.
**Key Initiatives and Policy Measures:**
* NITI Aayog and Indian Rare Earth Limited (IREL), under the Department of Atomic Energy (DAE), have jointly developed an incentivization framework to encourage the establishment of downstream industries utilizing rare earth elements.
**Stakeholder Engagement:**
* The Ministry of Heavy Industries conducted consultation meetings on September 26, 2024, and June 17, 2025, with research organizations and manufacturers of EVs and auto components to assess the state of indigenous rare earth permanent magnet production.
* The Department of Commerce has established an International Supply Chain Resilience Study Group, including representatives from various Ministries/Departments and industry associations.
* A Supply Chain Resilience Cell has been established within the Centre for WTO Studies (CWTOS) to support the International Supply Chain Resilience Study Group.
**International Collaboration:**
* India signed the Supply Chain Resilience Agreement in November 2023 under the Indo-Pacific Economic Framework for Prosperity (IPEF). The agreement, effective from February 24, 2024, aims to strengthen supply chains vital for national security and economic stability.
* A Supply Chain Council (SCC) has been established under the IPEF agreement, with the US as Chair and India as Vice Chair.
**Progress and Outcomes:**
* IREL, under DAE, has established a Rare Earth Permanent Magnet (REPM) plant for the indigenous production of Samarian-Cobalt magnets, specifically for use in the defense and atomic energy sectors.
**Industrial Zones:**
* The response does not mention the identification of industrial zones or clusters in Maharashtra for this sector.
Key Entities Referenced
Ministry of Heavy Industries: A ministry of the Government of India responsible for policies related to heavy industries.
Rare Earth Magnets: Magnets made from rare earth elements, crucial for EVs, electronics and defence manufacturing.
Maharashtra: A state in India where industrial zones or clusters for rare earth magnet production are being considered.
Jalgaon, Maharashtra: A region in Maharashtra, India, with robust connectivity that could be suitable for industrial development related to rare earth magnets.
NITI Aayog: A policy think tank of the Government of India involved in preparing a document on incentivizing downstream industry using Rare Earth Elements.
Indian Rare Earth Limited (IREL): A company under the Department of Atomic Energy (DAE) involved in rare earth element processing and downstream industry establishment.
Indo-Pacific Economic Framework for Prosperity (IPEF): A 14-member plurilateral grouping in the Indo-Pacific region under which India signed the Supply Chain Resilience Agreement.
Supply Chain Resilience Agreement: An agreement signed by India under the IPEF to strengthen supply chains crucial for national security and economic stability.
GOVERNMENT OF INDIA
MINISTRY OF HEAVY INDUSTRIES
LOK SABHA
UNSTARRED QUESTION NO. 1474
ANSWERED ON 29.07.2025
PROMOTING DOMESTIC PRODUCTION OF RARE EARTH MAGNETS
1474. SMT. SMITA UDAY WAGH:
Will the Minister of HEAVY INDUSTRIES be pleased to state:
(a) the key incentives, policy measures, and partnership models introduced by the Government
to promote domestic production of rare earth magnets crucial for EVs, electronics and defence
manufacturing;
(b) whether any industrial zones or clusters have been identified in Maharashtra for this sector,
and if not, the reasons for excluding potential-ready regions like Jalgaon, which has robust
connectivity through national highways, railway junctions and proximity to airports;
(c) the details of Government's engagement with stakeholders to secure alternate supply chains
and reduce dependence on rare earth imports from traditional countries;
(d) the details of response and feedback received from the electric vehicle and auto component
industry regarding India’s rare earth magnet initiative; and
(e) the details of early progress made under this initiative, including any investments, production
capacities or R&D break throughs that indicate reduced import reliance?
ANSWER
THE MINISTER OF STATE FOR HEAVY INDUSTRIES
(SHRI BHUPATHIRAJU SRINIVASA VARMA)
(a) & (b): NITI Aayog & Indian Rare Earth Limited (IREL) under Department of Atomic
Energy (DAE) has prepared a document on “Incentivisation framework for establishment of
downstream industry using Rare Earth Elements”.
(c) & (d): Ministry of Heavy Industries held two consultation meetings on 26.09.2024 and
17.06.2025 with stake holders including representatives from Research Organisation and
manufacturers of Electric Vehicles & Auto Components to assess the status of indigenous
production of Rare Earth Permanent Magnets in India.
Further, Department of Commerce has recently established a dedicated International
Supply Chain Resilience Study Group comprising representatives from various
Ministries/Departments and industry associations. Further, Supply Chain Resilience Cell has
been established in Centre for WTO Studies (CWTOS), which will work under the guidance of
International Supply Chain Resilience Study Group.-2-
India has signed the Supply Chain Resilience Agreement in November 2023 under the
Indo-Pacific Economic Framework for Prosperity (IPEF), a 14 member plurilateral grouping in
the region. The Agreement aims to strengthen supply chain crucial for national security and
economic stability. The Agreement came into force on February 24, 2024. Under the
Agreement, a Supply Chain Council (SCC) has been set up with the US as Chair and India as
Vice Chair.
(e): IREL under DAE has set-up a Rare Earth Permanent Magnet (REPM) plant in the
country for indigenous production of Samarian-Cobalt magnets exclusively for use in defence
and atomic energy sector.
******