Union Cabinet's Approval for REPM Manufacturing Scheme

The Union Cabinet has approved a Rs 7,280 crore scheme to promote the manufacturing of sintered rare earth permanent magnets (REPM). This initiative addresses a critical gap in India's electric vehicle (EV) and chip supply chains.

Objectives and Structure

• Creation of a 6,000 metric tonnes per annum integrated REPM capacity through five globally bid projects.
• Involves sales-linked incentives and capital subsidy over seven years.
• Support for end-to-end REPM manufacturing, from rare earth oxides to finished magnets, reducing import dependency.

Financial Allocation

• Rs 6,450 crore allocated for sales-linked incentives over five years.
• Rs 750 crore as capital support for the targeted capacity.
• Each selected player expected to achieve up to 1,200 metric tonnes per annum.

Projected Impact

• India’s REPM consumption expected to double between 2025 and 2030, driven by EVs and clean energy.
• Essential for supply chain security and India's Net Zero 2070 roadmap.
• Targets core upstream vulnerability in India’s EV and chip ecosystem.

Expert Opinions

• Mayank Shrivastava: The programme shores up a weak link in the electronics supply chain.
• Rajoo Goel: Emphasizes the initiative’s focus on critical supply chain components for electronics.
• Vivek Tyagi: Anticipates quick reduction in import dependence for vehicle manufacturers.

Regional and Strategic Developments

Investments in Andhra Pradesh

• Emerging as a hub for downstream electronics and semiconductor manufacturing.
• Companies like ASIP Technologies and Syrma SGS investing in semiconductor assembly and PCB plants.

Supply Security and Strategic Autonomy

• Improved magnet availability indirectly benefits electronics manufacturing services (EMS).
• Supports broader initiatives like “Vocal for Local” and “One District One Product”.
• Enhances strategic autonomy in defense and high-tech manufacturing.

Opportunities for MSMEs

• Potential to catalyze new electronics manufacturing clusters for MSMEs and startups.
• Promotes skilling and innovation in REPM and related applications.

Conclusion

The REPM scheme is a foundational initiative expected to strengthen India's electronics supply chain, with significant applications in EVs, defense, and advanced technology sectors. It aligns with national policies to enhance domestic manufacturing and reduce import dependency, contributing to strategic autonomy and innovation.