{"id":76008,"date":"2025-12-02T12:26:44","date_gmt":"2025-12-02T06:56:44","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=76008"},"modified":"2025-12-02T12:30:55","modified_gmt":"2025-12-02T07:00:55","slug":"indias-repm-scheme-7280-crore-push-to-reduce-china-dependence-in-rare-earth-magnets","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/indias-repm-scheme-7280-crore-push-to-reduce-china-dependence-in-rare-earth-magnets\/","title":{"rendered":"India\u2019s REPM Scheme: \u20b97,280-Crore Push to Reduce China Dependence in Rare Earth Magnets"},"content":{"rendered":"<h2><b>REPM Scheme Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To counter China\u2019s overwhelming dominance in rare earth magnet manufacturing, the Indian government has approved a \u20b97,280-crore scheme to promote domestic production of rare earth permanent magnets (REPMs).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">REPMs are critical components for EVs, renewable energy systems, electronics, aerospace, and defence. China currently controls <\/span><b>over 90%<\/b><span style=\"font-weight: 400;\"> of global REPM manufacturing and processing.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This gives it significant geopolitical leverage, which it has used during trade disputes.<\/span><\/li>\n<\/ul>\n<h2><b>Why India Needs Urgent Diversification<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India plans large-scale expansion in renewable energy and electric mobility, sharply increasing domestic demand for REPMs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government estimates that India\u2019s magnet consumption will double by 2030.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, India imports almost all of its REPM needs, making the country highly vulnerable to external shocks and supply disruptions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Also, in April 2025, China imposed export controls on magnets in response to US tariff measures, intensifying global supply concerns.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The newly approved scheme aims to develop domestic capabilities and reduce over-reliance on China.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While modest compared to China\u2019s scale, the initiative marks a crucial strategic shift as global stakes rise due to prolonged restrictions and supply chain uncertainty.<\/span><\/li>\n<\/ul>\n<h2><b>Government\u2019s REPM Scheme: What It Aims to Achieve<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme marks the <\/span><b>beginning of a long, challenging journey<\/b><span style=\"font-weight: 400;\"> for India.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme targets creation of <\/span><b>6,000 MTPA<\/b><span style=\"font-weight: 400;\"> of integrated rare earth permanent magnet (REPM) manufacturing capacity.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This capacity will be divided among <\/span><b>five beneficiaries<\/b><span style=\"font-weight: 400;\">, each eligible for up to 1,200 MTPA through a competitive bidding process.<\/span><\/li>\n<\/ul>\n<h3><b>Incentives and Financial Support<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Selected companies will receive:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">\u20b96,450 crore in sales-linked incentives over five years<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">\u20b9750 crore as capital subsidy for setting up integrated facilities<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The financial support is designed to encourage large-scale, commercially viable manufacturing.<\/span><\/li>\n<\/ul>\n<h3><b>Focus on High-Demand NdFeB Magnets<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme prioritises sintered rare-earth permanent magnets, specifically neodymium\u2013iron\u2013boron (NdFeB) magnets, which are the strongest and most widely used.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These magnets rely on:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Light rare-earths<\/b><span style=\"font-weight: 400;\">: Neodymium (Nd), Praseodymium (Pr)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Heavy rare-earths<\/b><span style=\"font-weight: 400;\">: Dysprosium (Dy), Terbium (Tb) for better high-temperature performance<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><b>What Integrated REPM Manufacturing Involves<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The REPM production chain includes:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Mining<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Beneficiation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Processing<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Extraction<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Refining to rare earth oxides<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Conversion of oxides to metal<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Metal to alloy<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Alloy to magnet<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme will support facilities capable of performing the final three stages:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Rare earth oxide \u2192 metal<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Metal \u2192 alloy<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Alloy \u2192 rare earth permanent magnet<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>India\u2019s Heavy Dependence on China<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India imported over 53,000 tonnes of rare earth magnets in 2024\u201325, with more than 90% coming from China.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The new scheme aims to reduce this reliance and build domestic capacity, but major challenges remain.<\/span><\/li>\n<\/ul>\n<h3><b>Where India Stands in the Global REPM Landscape<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Outside China, only countries like Japan and Vietnam produce REPMs, and their global share is limited.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India currently has no commercial-scale manufacturing, only small-scale capabilities at select firms.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">China produces around 2,40,000 tonnes of REPMs annually\u2014far beyond India\u2019s planned 6,000-tonne capacity under the new scheme, underscoring the vast gap.<\/span><\/li>\n<\/ul>\n<h3><b>Raw Material Bottlenecks: A Key Constraint<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India produces some light rare-earth oxides through IREL\u2014such as neodymium\u2013praseodymium (NdPr) oxides\u2014but <\/span><b>no heavy rare-earth oxides<\/b><span style=\"font-weight: 400;\"> like dysprosium and terbium.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These heavy rare earths are essential for high-strength, high-temperature NdFeB magnets.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Thus, India will still need to import critical raw materials, limiting true self-reliance.<\/span><\/li>\n<\/ul>\n<h3><b>The Scale and Cost Challenge<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">China\u2019s dominance comes from:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Massive production scale<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Fully integrated value chain<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Significant subsidies<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These factors make China\u2019s magnets far cheaper, making cost competitiveness a major hurdle for Indian manufacturers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unless mandated through policy, users are unlikely to buy magnets that are significantly more expensive than Chinese imports.<\/span><\/li>\n<\/ul>\n<h2><b>Global Diversification Efforts Are Growing<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A 2022 US Department of Energy report shows that 93% of the global NdFeB magnet market is dominated by sintered magnets\u2014and China controls almost the entire supply chain, from mining to magnet manufacturing.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This has pushed countries worldwide to reduce dependency on China.<\/span><\/li>\n<\/ul>\n<h3><b>International Initiatives to Secure Critical Minerals<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Quad Initiative (2024)<\/b><span style=\"font-weight: 400;\"> &#8211; In July, the Quad countries \u2014 India, Australia, Japan, and the US \u2014 launched a supply chain initiative to secure access to critical minerals, reducing reliance on China.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>G7 Critical Minerals Action Plan (2024)<\/b><span style=\"font-weight: 400;\"> &#8211; India endorsed the G7\u2019s Critical Minerals Action Plan, which focuses on building diversified and resilient global supply chains.<\/span><\/li>\n<\/ul>\n<h3><b>India\u2019s National Critical Mineral Mission (NCMM)<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Launched in January 2024 for seven years (2024\u201325 to 2030\u201331), the NCMM aims to secure India\u2019s critical mineral supply chain through:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Reliable domestic and overseas mineral access<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Strengthening exploration, processing, and recycling<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Improving technology, regulation, and financing<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The mission has an outlay of \u20b916,300 crore.<\/span><\/li>\n<\/ul>\n<h3><b>Reforming Domestic Mineral Governance<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In 2023, India identified 30 minerals as <\/span><b>\u201ccritical\u201d.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government amended the MMDR Act, 1957, giving the Centre exclusive powers to auction critical and strategic minerals such as lithium, cobalt, and rare earth elements.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Since the amendment, 34 critical mineral blocks have been auctioned.<\/span><\/li>\n<\/ul>\n<h3><b>Securing Overseas Resources: The Role of KABIL<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India established Khanij Bidesh India Limited (<\/span><b>KABIL<\/b><span style=\"font-weight: 400;\">), a joint venture tasked with identifying and developing critical mineral assets abroad.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">KABIL has signed an agreement with Camyen, a state-owned firm in Catamarca, Argentina, to explore and mine five lithium brine blocks, expanding India\u2019s access to essential battery minerals.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/china-chokehold-india-rs-7280-crore-rare-earth-magnets-push-10394389\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a> | <a href=\"https:\/\/www.thehindu.com\/business\/Economy\/can-india-become-self-reliant-in-ree-production\/article70329578.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India launches a \u20b97,280-crore REPM scheme to build domestic REPM capacity, cut reliance on China, and strengthen clean energy, EV, and defence manufacturing.<\/p>\n","protected":false},"author":18,"featured_media":76021,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,3985,22,59],"class_list":{"0":"post-76008","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-repm-scheme","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/76008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=76008"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/76008\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/76021"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=76008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=76008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=76008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}