**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 various sectors including electric vehicles (EVs), electronics, and defense manufacturing.
**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 and Supply Chain Resilience:**
* The Ministry of Heavy Industries conducted two consultation meetings on September 26, 2024, and June 17, 2025, with research organizations and manufacturers of EVs and auto components. The aim was to evaluate the current status of indigenous rare earth permanent magnet production.
* The Department of Commerce has established an International Supply Chain Resilience Study Group, comprising representatives from various Ministries/Departments and industry associations.
* A Supply Chain Resilience Cell has been created within the Centre for WTO Studies (CWTOS) to support the International Supply Chain Resilience Study Group.
* India signed the Supply Chain Resilience Agreement in November 2023 under the Indo-Pacific Economic Framework for Prosperity (IPEF), a 14-member plurilateral grouping. The agreement, effective from February 24, 2024, aims to fortify supply chains critical for national security and economic stability. A Supply Chain Council (SCC) has been established under this agreement, with the US as Chair and India as Vice Chair.
**Progress and Investments:**
* IREL, under DAE, has established a Rare Earth Permanent Magnet (REPM) plant in India to produce Samarian-Cobalt magnets specifically for use in the defense and atomic energy sectors.
**Industrial Zones:**
* The policy document does not identify any specific industrial zones or clusters in Maharashtra for this sector. It also does not detail the reasons for excluding regions like Jalgaon.
Key Entities Referenced
Ministry of Heavy Industries: The Indian government ministry responsible for promoting the growth and competitiveness of the capital goods and engineering sectors.
Rare Earth Magnets: Magnets made from rare earth elements, crucial components in electric vehicles, electronics, and defense manufacturing.
Maharashtra: A state in India considered as a potential location for industrial zones or clusters related to rare earth magnet production.
Jalgaon, Maharashtra: A region in Maharashtra, India, noted for its connectivity, considered as a potential location for industrial zones but was ultimately excluded.
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 the production of rare earth elements and magnets.
Indo-Pacific Economic Framework for Prosperity (IPEF): A plurilateral economic framework involving 14 member countries, including India, aimed at strengthening supply chains.
Supply Chain Resilience Agreement: An agreement signed by India in November 2023 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.
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