L&T, Coal India and 20 Microns pursue India’s ₹72.8 billion rare-earth magnet scheme
L&T, Coal India and 20 Microns are positioning for India’s ₹72.8 billion program to build domestic sintered rare-earth permanent-magnet capacity. The scheme targets 6,000 tonnes per year, but access to raw materials and production technology remains a central challenge.
Indian companies target magnet incentives
Larsen & Toubro, state-controlled Coal India and industrial-minerals producer 20 Microns are pursuing opportunities under India’s ₹72.8 billion program for sintered rare-earth permanent magnets, according to The Financial Express. Their interest puts companies with markedly different industrial backgrounds into the contest to establish a domestic supply chain for components used in electric vehicles, wind turbines, electronics, aerospace and defence systems.
The scheme was approved by the Union Cabinet on November 26, 2025. It seeks to create 6,000 tonnes per year of integrated capacity through a global competitive bidding process. Up to five beneficiaries may be selected, with each eligible to build between 600 and 1,200 tonnes of annual capacity. The program runs for seven years: a two-year period for establishing facilities followed by five years of incentives linked to actual sales.
Funding favors integrated production
The ₹72.8 billion outlay includes ₹64.5 billion in sales-linked incentives and a ₹7.5 billion capital subsidy. The intended production chain extends from rare-earth oxides to metals, alloys and finished magnets. This makes access to processing technology, technical partners and reliable feedstock as important as the bidders’ ability to finance new plants.
The three named groups bring different potential advantages. L&T has large-project engineering and advanced-manufacturing capabilities, while Coal India is a state-controlled mining company. 20 Microns operates in industrial minerals. The available source material does not disclose their proposed capacities, investment budgets, technologies or consortium arrangements, so their relative position cannot yet be measured against the tender’s technical and commercial criteria.
Raw materials remain the main constraint
The Financial Express has reported that IREL (India) will allocate 500 tonnes per year of neodymium-praseodymium oxide to only three selected beneficiaries, although the scheme permits as many as five winners. Prospective bidders have also questioned incentives based on magnet weight rather than quality. These provisions matter because high-performance magnets must meet demanding specifications, particularly in high-temperature applications.
India’s broader objective is to reduce exposure to China, which The Financial Express says supplies 71% of the country’s permanent-magnet imports and accounts for about 90% of global rare-earth processing capacity. The program could give Indian manufacturers and their customers a domestic alternative, but the two-year construction window means relief will not be immediate. The outcome will depend on which bidders can secure oxide supply, acquire proven processing technology and produce qualified magnets consistently at commercial scale.