New Delhi, Nov. 27 -- The Union cabinet on Wednesday approved a Rs.7,280 crore-incentive scheme for creating five manufacturing facilities for rare earth permanent magnets in the country, with a combined annual capacity of 6,000 metric tonnes to meet the entire annual requirement of the automobile, electronics, aerospace, renewables and defence sectors in three to four years. China currently has a stranglehold over global rare earth supplies, and has leveraged this to good effect. Explaining the rationale of investing in domestic manufacturing capabilities for rare earth permanent magnets (REPM), Union information and broadcasting minister Ashwini Vaishnaw said: "This sector is of strategic importance. We have to be present in this. Without this sector several types of manufacturing will come to a standstill." Referring to the recent news on the US-China dialogue over rare earth supplies, he said: "Rare earth is becoming such an important negotiating factor. it's very important to have a resilient supply chain." Responding to the US tariffs, China introduced export controls for rare earth elements in April this year, disrupting the global supply chain of these because it enjoys near monopoly in rare earth exports. As per Vaishnaw, the scheme cleared by the Union Cabinet aims to boost India's self-reliance in this critical area. Although Chinese export curbs have been eased, there's no telling when India could choose to tighten supplies again. Manufacturers of electrical vehicles, drones, semiconductors and medical equipment in India are dependent on the imports of rare earth elements and REPM. The integrated Rare Earth Permanent Magnet manufacturing scheme is aligned with the previously announced Semiconductor Mission and the National Critical Mineral Mission (NCMM), Vaishnaw explained. The first-of-its-kind scheme aims to establish 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing in India, positioning India as a key player in the global REPM market. Each of the five units will have a capacity of at least 1,200 MTPA. The five selected firms, under the scheme, may raise their production capacity, Vaishnaw said, adding that they will be able to meet the entire 4,000-5,000 MT annual domestic demand in the next three to four years. They can also export the surplus, he added. The total financial outlay of the scheme is Rs.7,280 crore, comprising a sales-linked incentives of Rs.6,450 crore on REPM sales for five years and capital subsidy of Rs.750 crore for setting up an aggregate of 6,000 MTPA of REPM manufacturing facilities, an official statement said. The total duration of the scheme will be seven years from the date of award, including a two-year gestation period for setting up an integrated REPM manufacturing facility, and five years for incentive disbursement on the sale of REPM. "By fostering indigenous capabilities in REPM production, the scheme will not only secure the REPM supply chain for domestic industries but also support the nation's Net Zero 2070 commitment. It embodies the government's unwavering commitment to build a technologically self-reliant, globally competitive, and sustainable industrial base, in line with the vision of Viksit Bharat @2047," the statement added. As per the minister, selection of firms will be done through a transparent system and the government will issue guidelines for the scheme "rapidly" as the projects will be implemented "fast". He said the scheme is well prepared with "extensive" inter-ministerial discussions and stakeholders' consultations. He said both public sector as well as private sector firms can apply for the scheme with a transparent selection process in place. Selected companies under the scheme will also be free to choose manufacturing locations, he added. Driven by the rapidly growing demand from electric vehicles, renewable energy, industrial applications, and consumer electronics, India's consumption of REPMs is expected to double by 2030 from 2025. At present, India's demand for REPMs is met primarily through imports. REPMs are one of the strongest types of permanent magnets and are vital for electric vehicles, renewable energy, electronics, aerospace and defence applications. The scheme cleared Wednesday will support the creation of integrated REPM manufacturing facilities, involving conversion of rare earth oxides to metals, metals to alloys, and alloys to finished REPMs. Reacting to the development, Pankaj Mohindroo, chairman, ICEA (an association of electronics manufacturers), said: "The Cabinet's approval of the Rs.7,280 crore scheme for Sintered Rare Earth Permanent Magnets is a strategic milestone for India's electronics and electric mobility ecosystem."...