Govt plans rare earth magnet push; pre-bid meeting set for 7 April

NEW DELHI: The ministry of heavy industries (MHI) will on 7 April hold a pre-bid consultation on the recently floated request for proposals (RFP) under its ₹7,280-crore scheme to incentivise the production of rare earth magnets, which are critical components used in sectors such as electric vehicles, renewable energy, defence, electronics and aerospace.

The pre-bid meeting will happen at the India Habitat Centre in New Delhi, the ministry said in a statement on Thursday.

The pre-bid meeting will provide the stakeholders, including domestic and international industry players and prospective bidders, an opportunity to gain a clear understanding of the scheme’s guidelines, eligibility criteria, and implementation framework and seek clarifications before submitting their bids, the statement said.

Mint had first reported the 7 April pre-bid consultation on 20 March, the day the RFP was issued.

The scheme received the Union Cabinet's assent on 26 November last year, following which interested parties have begun consultations with the government.

The scheme will provide capital incentives to five rare earth magnet making plants, along with sales-linked incentives for five years. The scheme is expected to run for seven years, with the first two years for gestation of investment and setting up of rare earth processing plants.

The scheme was designed to reduce India's dependence on China for rare earth magnets. China controls about 60% of the world's rare earth mining and 90% of the world's rare earth processing capacity.

India's incentive scheme took shape after China halted exports of rare earth magnets in April 2025 amid a tariff war against the US.

About 20 companies have participated in previous consultations with the ministry.

In these consultations, some companies that are considering setting up magnet-making plants in India under this scheme have raised concerns about raw material supply shortages, Mint reported on 12 January this year.

This is because India's sole rare earth miner India Rare Earth Ltd (IREL) will supply rare earth oxides—the required raw material—to only three of the lowest bidders, out of five total magnet making plants, as per scheme guidelines.

However, the government has assured that raw material supplies will be met as IREL will supply 500 tonnes of raw material to select companies.

The thumb rule for magnet making is that for every tonne of raw material, three tonnes of magnets can be made, meaning a 500-tonne supply from IREL is enough to make 1,500 tonnes of magnets.

The scheme, however, has set a target of raising India's magnet making capacity to 6,000 tonnes per annum.