Centre to set up rare earth corridors in 4 coastal states; boost for magnets, EV supply chain

Finance Minister Nirmala Sitharaman on Sunday said the government will support mineral-rich states like Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing in the strategic sector.

“A Scheme for Rare Earth Permanent Magnets was launched in November 2025. We now propose to support the mineral-rich States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing,” Sitharaman said in her budget speech.

India has one of the world’s largest rare earth reserves, largely located in coastal regions. At present, IREL (India) Ltd is the only company in the country engaged in mining rare earth ores and refining them into rare earth oxides.

In November last year, the Union Cabinet approved a ₹7,280-crore scheme to promote domestic manufacturing of sintered rare earth permanent magnets (REPM), a critical component used in electric vehicles, renewable energy systems and defence equipment.

The “Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets”, notified in December 2025, seeks to establish 6,000 metric tonnes per year of integrated manufacturing capacity in the country.

According to a notification issued by the Ministry of Heavy Industries, the initiative aims to build a complete domestic value chain for converting rare earth oxide into sintered Neodymium-Iron-Boron (NdFeB) magnets, considered the strongest type of permanent magnets and essential for strategic and industrial applications.

“Through this scheme, the Government of India intends to incentivise setting up of 6,000 MTPA of integrated rare earth oxide to sintered NdFeB REPM manufacturing facilities in the country,” the ministry had said.

India currently imports almost its entire requirement of sintered NdFeB magnets, which are widely used in motors, turbines, electronics and aerospace systems.

While the country has upstream capabilities in mining, separation and oxide refining, it lacks industrial-scale midstream capacity for converting oxides into metals, alloys and finished magnets.

Under the scheme, indigenously produced sintered NdFeB magnets made from neodymium-praseodymium (NdPr) oxide will be eligible for sales-linked incentives as well as capital subsidy.

The government will allocate up to 6,000 MTPA of integrated sintered NdFeB magnet manufacturing capacity to five applicants through a transparent global tender enquiry process by issuing a request for proposal (RFP).

The minimum allocation to a beneficiary will be 600 MTPA, extendable up to a maximum of 1,200 MTPA in multiples of 100 MTPA, the notification said.