Union Cabinet’s approval of a Rs 7,280 crore rare earth permanent magnet (REPM) scheme has been welcomed by industry executives as a major boost to India’s EV and electronics supply chains. The programme aims to create 6,000 metric tonnes per annum of integrated REPM capacity through five globally bid projects, supported by sales-linked incentives and capital subsidies over a seven-year period.For the first time, India will support end-to-end REPM manufacturing, from rare earth oxides to finished magnets. The initiative aims to reduce import dependence and meet the growing demand from electric vehicles, renewable energy, industrial electronics, and defence.Rajoo Goel, secretary-general of the Electronic Industries Association of India, said the scheme is “a first of its kind initiative focused on the core of the supply chain for electronics.” He added that rare earth magnets are crucial for electric motors, defence systems, renewable energy, computer hard drives, and smaller electronics like smartphones.Experts highlight critical role of REPMsIndustry leaders emphasised the programme’s strategic importance for electronics manufacturing. Mayank Shrivastava, professor at the Indian Institute of Science, Bengaluru, and cofounder of AGNIT Semiconductors, said the programme is “as critical as building fabs” because advanced electronics depend on magnetic materials as much as on silicon.”Vivek Tyagi, executive council member at the India Electronics and Semiconductor Association, noted that the initiative could quickly reduce import dependence for two- and three-wheeler manufacturers while also benefiting four-wheeler players over time.The REPM scheme is seen as complementary to the India Semiconductor Mission and other electronics initiatives. ASIP Technologies CEO Venkata Simhadri said the REPM push, along with semiconductor incentives, addresses key elements of the EV supply chain, “from permanent magnet motors on the mechanical side to compound semiconductor-based motor control and battery charging systems on the electronics side.”EMS and Fabless firms expect supply chain benefitsElectronics manufacturing services (EMS) companies anticipate indirect benefits from improved magnet availability. Syrma SGS managing director Jasbir Singh Gujral said a domestic magnet ecosystem “will indirectly help EMS companies by making the supply of magnet-based components more predictable and reducing the risk of supply chain disruptions.”An EMS executive, speaking on condition of anonymity, called the scheme “very well curated…coming at the apt time” and added, “There is a belief that the investments are going to come in. And this is again de-risking from the borderland country which is absolutely prudent.”For fabless semiconductor firms, the initiative signals India’s intent to deepen hardware value chains. BigEndian Semiconductors cofounder Sunil Kumar noted that gestation-heavy incentive schemes tend to favour established large organisations, but stressed that “innovation often comes from smaller challengers, making it important for policy to be calibrated to company size.”Boosting MSMEs, startups, innovationAcademia and skill-development experts see the REPM programme as a catalyst for MSME-focused electronics clusters, generating jobs and nurturing startups in REPM and related applications. T Senthil Siva Subramanian of Hindustan College of Science and Technology said such clusters could feed into initiatives like “Vocal for Local” and “One District One Product” while advancing UN Sustainable Development Goals.Experts also highlighted the strategic significance of domestic REPM capacity. Subramanian noted that local design and production capabilities could enhance India’s global standing in high-tech manufacturing and drive innovation in rare earth magnet-based products, which are vital across defence, medical devices, nuclear research, and precision agriculture.Industry consensus suggests that the REPM scheme, while long-term, could become a foundational layer supporting EVs, robotics, semiconductors, and flexible electronics, reinforcing India’s position in the global technology supply chain.