Rare Earth Magnets Manufacturing in India: This company is set to manufacture rare earth magnets in India; eyeing the government’s ₹7,280 crore incentive scheme.

Larsen & Toubro (L&T) is preparing to manufacture rare earth magnets in India. According to Bloomberg, and sources familiar with the matter, the company is gearing up to bid for the government’s ₹7,280 crore incentive scheme. So far, 15 bids have been received. It is worth noting that rare earth permanent magnets are used in electric vehicle motors, wind turbines, industrial robots, and various types of electronics.

Plans to Manufacture Rare Earth Magnets in India

Larsen & Toubro (L&T) is planning to manufacture rare earth magnets in India. The company will require a technology partner possessing the necessary expertise to enter this sector, as the manufacturing of rare earth magnets involves high-precision engineering.

15 Bids for the Government’s Incentive Scheme

The government has received 15 bids for this scheme so far. These include Japan’s Proterial and a consortium involving two Indian automotive companies. L&T’s potential entry would mark a shift into a new sector, distinct from its traditional business operations, which have primarily focused on construction, heavy engineering, and industrial projects.

Plan to Reduce Dependence on China

L&T’s potential entry into the rare earth permanent magnet space aligns with the government’s initiative to build a domestic supply chain. China controls the production of 90 percent of the world’s rare earth magnets. Last April, China imposed restrictions on the export of this critical component. Beyond electric vehicle motors, these magnets are used in wind turbines, industrial robots, and various electronics.

Government Approves 7-Year Program

Last year, India approved a seven-year program to boost magnet production. This includes ₹6,450 crore for sales-linked incentives and ₹750 crore for capital subsidies. The government aims to establish a domestic production capacity of 6,000 metric tonnes of rare-earth magnets annually. The scheme envisages supporting approximately five companies. The government expects that these incentives will encourage domestic companies and foreign magnet manufacturers to come forward and start production in India.