Bids invited to build rare-earth magnet plants

Tenders open under the Cabinet-approved scheme to make sintered NdFeB permanent magnets in India — the country's first push to build the full magnet value chain at home.

What happened

• The Ministry of Heavy Industries (MoHI) released the Request for Proposal (RFP) to select beneficiaries who will set up integrated sintered NdFeB rare-earth permanent magnet (REPM) manufacturing facilities in India.
• The tender is floated under the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet, which the Union Cabinet approved on 26 November 2025 with a financial outlay of ₹7,280 crore.
• The scheme aims to build a total capacity of 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing — described by the Ministry as a first-of-its-kind initiative.
• Bidding runs as a transparent two-stage Least Cost System (LCS) — a Technical Bid and a Financial Bid — conducted online through the Central Public Procurement (CPP) Portal.
• Key dates: tender documents available from 20 March 2026; pre-bid conference on 7 April 2026; bid due date 28 May 2026; technical bids to be opened 29 May 2026.
• Selected applicants become eligible for both a capital subsidy and sales-linked incentives, with a limited assured supply of feedstock for the lowest bidders.

Background & context

Rare-earth permanent magnets are the quiet enabler of the clean-energy and electronics economy. The strongest commercial permanent magnets in the world are built from neodymium, iron and boron (NdFeB, or Nd-Fe-B), and they are the spinning heart of the traction motors in electric vehicles, the generators inside wind turbines, hard-disk drives, smartphone speakers, robotics, and precision-guided defence systems. The "rare earths" they depend on — chiefly neodymium and praseodymium (together "NdPr") — are not geologically rare, but the mining, separation and especially the downstream magnet-making are concentrated overwhelmingly in a single country, China. That concentration turns a routine industrial input into a strategic vulnerability: a supplier that controls the magnets controls a choke-point in the EV, renewable-energy and defence supply chains.

India holds sizeable rare-earth reserves in its monazite-bearing beach sands, and the public-sector miner IREL (India) Ltd (formerly Indian Rare Earths Ltd, under the Department of Atomic Energy) already extracts and processes these minerals. What India has historically lacked is the middle and end of the value chain — the alloying, strip-casting, sintering and finishing that turn oxide into a usable magnet. The result has been a country that exports raw or semi-processed rare earths and re-imports finished magnets at a premium. The new scheme is designed to close exactly this gap by anchoring the complete chain — from NdPr oxide to finished sintered magnet — on Indian soil. It sits within the broader self-reliance push (Atmanirbhar Bharat) and the family of Production/incentive-linked schemes the government has used since 2020 to localise critical manufacturing, from semiconductors and solar cells to advanced chemistry cell batteries.

On the same day this RFP was issued, the Department of Science and Technology separately inaugurated a pilot plant for Nd-Fe-B magnet manufacture at ARCI, Hyderabad — an end-to-end "strip-cast alloy to finished magnet" facility, built by an autonomous DST institution — signalling a coordinated, two-track approach: a research-and-demonstration plant on the science side and a large commercial-scale incentive scheme on the industry side. The two announcements together describe the same ambition from both ends — laboratory proof-of-process and bankable industrial capacity — and are best read as a pair.

Why "sintered" and why these specific elements matter is worth pinning down, because the exam tests the chemistry as much as the policy. A sintered NdFeB magnet is made by milling the alloy into a fine powder, aligning the particles in a magnetic field, pressing them, and then heating ("sintering") below the melting point so the grains fuse into a dense, strongly magnetic solid. The resulting magnet has the highest energy product of any commercially available magnet, which is exactly why it lets motors and generators be smaller, lighter and more efficient. Neodymium and praseodymium supply the magnetism; small additions of dysprosium and terbium (themselves "heavy" rare earths) are often used to keep the magnet stable at the high temperatures inside an EV motor. Because so many of these elements cluster at one stage of one country's industry, building the sintering and finishing capability — not just digging the ore — is what genuinely reduces dependence.

For Prelims

• Scheme name: Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet.
• Approved by: Union Cabinet (chaired by the Prime Minister) on 26 November 2025.
• Nodal ministry: Ministry of Heavy Industries (MoHI) — the same ministry that runs the auto and ACC-battery PLI schemes.
• Outlay: ₹7,280 crore total = ₹750 crore capital subsidy + ₹6,450 crore sales-linked incentive.
• Target capacity: 6,000 MTPA of integrated NdFeB magnet manufacturing.
• Per-beneficiary allocation: between 600 MTPA and 1,200 MTPA, in multiples of 100 MTPA — meaning several beneficiaries, not a single winner.
• Feedstock support: limited assured supply of NdPr oxide from IREL (India) Ltd for the three lowest bidders.
• Selection method: transparent two-stage Least Cost System (Technical + Financial bid) on the CPP Portal.
• The product: sintered NdFeB (Neodymium-Iron-Boron) magnets — among the most powerful permanent magnets known.
• End-uses: electric vehicles, wind turbines, high-end electronics, aerospace and defence systems.
• The chain it builds: NdPr oxide → alloy → sintered magnet — a complete domestic value chain to cut import dependence.

It helps to remember where this sits in the larger set of critical-mineral and localisation moves: the MoHI's auto-component and Advanced Chemistry Cell (ACC) battery PLI schemes; the National Critical Mineral Mission for securing upstream supply; Khanij Bidesh India Ltd (KABIL), the joint venture set up to acquire overseas critical-mineral assets; and the science-side ARCI pilot plant and ANRF's MAHA mission. Rare earths sit on India's notified list of critical minerals, and this scheme is the magnet-manufacturing leg of that wider strategy. A clean way to file it: IREL mines and refines (upstream) → this MoHI scheme makes the magnets (midstream/downstream) → EV, wind and defence makers consume (end-use).

Why it matters

The strategic logic is supply-chain security. As India scales electric mobility and renewable power, demand for NdFeB magnets will rise sharply — an EV traction motor and a direct-drive wind turbine each need kilograms of these magnets — yet almost the entire finished-magnet supply is imported from one source. A disruption, an export restriction, or a price shock at that single node would ripple straight into India's EV, wind-energy and defence programmes. By incentivising a complete domestic value chain, the scheme converts a dependency into industrial capacity, and gives Indian EV, electronics and defence manufacturers a more secure, predictable input.

The design also reflects a learned lesson about why earlier private attempts stalled: magnet-making is feedstock-hungry, and without secure oxide supply a domestic plant cannot run. By bolting assured NdPr oxide from IREL onto the incentive — for the three lowest bidders — the government de-risks the part of the chain markets could not solve alone. The capital-subsidy-plus-sales-incentive structure rewards builders who actually produce and sell, not merely those who announce capacity. Beyond economics, the move advances India's standing in the critical-minerals geopolitics now reshaping clean-energy supply chains, where the countries that control magnets — not just mines — hold the leverage.

For Mains

Related: ARCI Nd-Fe-B pilot plant, Hyderabad ↗ · Science & Tech · This week's cards