India's rare-earth magnet supply chain vulnerability has become critical as the country imports 84-90% of its rare-earth magnets directly from China between 2022-2025. Despite sitting on 7.23 million tonnes of rare-earth oxides—the world's second-largest reserves outside China—India remains heavily dependent on Chinese supply chains for vital components used in electric vehicles, wind turbines, and defence systems. The ₹7,280-crore production-linked incentive (PLI) scheme approved by the government in November 2024 represents India's first serious attempt to establish domestic manufacturing capabilities, but with the 29 July deadline approaching, few serious bids appear to have been submitted.
Andhra Pradesh is pursuing an ambitious ₹20,000 crore investment pipeline across upstream rare-earth processing and downstream magnet manufacturing, according to Sagili Shan Mohan, Chief Executive Officer of the Andhra Pradesh Economic Development Board (APEDB). ₹16,000 crore is expected from upstream processing projects, while downstream magnet manufacturing could account for another ₹4,000 crore. The proposed projects are being evaluated in the Nellore-Tirupati region and around Visakhapatnam, where the state has identified suitable industrial land and logistics infrastructure. As reported by Business Standard, the state is in discussions with international companies including those from Japan and Canada, with some discussions reaching advanced stages. The initiative is part of the Centre's broader push to develop dedicated rare-earth corridors in four states, including Andhra Pradesh, Kerala, Tamil Nadu, and Odisha.
The PLI scheme requires companies to demonstrate ₹180 crore net worth for the smallest manufacturing slot and ₹375 crore for the largest, creating significant barriers for potential participants. According to reports, Mecwin Technologies' Shiva Kumar H.M., who has independently solved raw material sourcing challenges and secured 2,000 tonnes of NdPr oxide at 20% below IREL's price, remains ₹125 crore short of the minimum threshold. The scheme offers ₹2,150 per kg incentive over five years plus 15% capital subsidy, but companies face equipment cost inflation with Japanese suppliers quoting ₹93 crore for machinery that normally costs ₹21 crore. As reported, the technical evaluation committee includes members from heavy industries, mines, renewable energy, and science departments to vet bids before financial submissions.
The heavy industries ministry has extended the deadline to submit bids for the rare earth magnet PLI scheme by a month to 29 July 2026. This marks the second extension of the application deadline, which was first slated to end on 28 May 2026 and was later extended to 29 June 2026. According to reports from Mint, the extension came after over half a dozen potential applicants requested more time, with the scheme receiving only four bids compared to the ministry's plan to award benefits to five companies to achieve 6,000 tonnes annual production. After the ₹7,280-crore ($772 million) incentives scheme was announced last November, 26 companies initially evinced interest and turned up for the pre-bid meeting in April this year.
Despite expressed interest, major Indian conglomerates have not submitted bids before the 29 July deadline. According to reports, the Tata Group, Larsen & Toubro, Reliance Industries Ltd, and JSW Group have all expressed interest but have not yet submitted formal applications. Vedanta's subsidiary NAN Magnetech has announced plans for a ₹1,250 crore investment in phase 1 with initial capacity of 1,200 tonnes, expanding to 10,000 tonnes in phases. However, industry experts suggest that for large groups, a 1,200-tonne magnet plant represents a rounding error in revenue but demands disproportionate senior management attention given the complexity of rare-earth supply chains. Vedanta's group company Hindustan Zinc recently won a rare-earth mining block, positioning the conglomerate for downstream magnet manufacturing capabilities.
