The Ministry of Heavy Industries has invited bids to establish domestic manufacturing capacity for sintered neodymium-iron-boron (NdFeB) rare earth permanent magnets, widely used in electric vehicles, wind turbines, high-end electronics, aerospace, and defense systems.

The last day to submit the bids is May 28, 2026. Bids will be opened on May 29, 2026.

Bidders must submit a tender fee of ₹450,000 (~$4,832), and the bid security is ₹10 million (~$107,388).

The performance security for the five selected bidders is as follows:

• 600 MTPA: ₹200 million (~$2.15 million)
• 700–900 MTPA: ₹300 million (~$3.22 million)
• 1,000–1,200 MTPA: ₹400 million (~$4.29 million)

The program to promote the manufacturing of sintered rare earth permanent magnet targets is developing up to 6,000 metric tons per annum (MTPA) capacity.

Individual project sizes will range from 600 MTPA to 1,200 MTPA, with bids required in multiples of 100 MTPA.

Selected bidders must establish integrated manufacturing facilities that cover the entire production chain, from neodymium-praseodymium (NdPr) oxide through metal and alloy production to the manufacture of sintered NdFeB magnets.

These facilities may comprise one or more units across locations in India, provided they are wholly owned and controlled by the bidder, and all intermediate processing is carried out in-house.

The program tenure is seven years from the date of the letter of award (LOA), including a two-year gestation period for setting up manufacturing facilities and five years for incentive disbursement.

Bidders must meet the following minimum net worth requirements based on proposed capacity:

• 600 MTPA: ₹1.8 billion (~$19.33 million)
• 700–800 MTPA: ₹2.45 billion (~$26.31 million)
• 900–1,000 MTPA: ₹3.1 billion (~$33.30 million)
• 1,100–1,200 MTPA: ₹3.75 billion (~$40.25 million)

Applicants must submit a detailed project report (DPR) outlining the bidder profile, committed capacity, project location, estimated project cost, financing plan, business strategy, investment projections, implementation timelines, and financial projections.

The DPR must also demonstrate technological readiness across the manufacturing chain, including oxide-to-metal conversion, alloy preparation, powder production, magnet fabrication and sintering, and testing capabilities.

It must further include a manufacturing process flowchart, a capital equipment plan, a sourcing strategy, the availability of skilled manpower, and prior experience in manufacturing and marketing NdFeB magnets.

Selected bidders must meet the following investment thresholds:

• Within one year: Minimum eligible investment of ₹1.5 billion (~$16.11 million)
• Within two years:
  • 600 MTPA: ₹3 billion (~$32.22 million)
  • 700–900 MTPA: ₹4.5 billion (~$48.33 million)
  • 1,000–1,200 MTPA: ₹6 billion (~$64.44 million)

• 600 MTPA: ₹3 billion (~$32.22 million)
• 700–900 MTPA: ₹4.5 billion (~$48.33 million)
• 1,000–1,200 MTPA: ₹6 billion (~$64.44 million)

They must commission at least 50% of the allocated capacity within three years of the letter of award and begin commercial production for that portion.

Eligible investments include expenditure on plant and machinery, equipment, utilities, research and development, and technology transfer related to integrated magnet manufacturing. Expenditures on used or refurbished equipment, leased assets, and assets acquired through a slump sale are not eligible.

The government will provide capital support of 15% of the eligible investment, subject to capacity-linked caps.

The capital subsidy is capped as follows:

• 600 MTPA: ₹750 million (~$8.05 million)
• 700–800 MTPA: ₹1 billion (~$10.74 million)
• 900–1,000 MTPA: ₹1.2 billion (~$12.89 million)
• 1,100–1,200 MTPA: ₹1.5 billion (~$16.11 million)

In addition to capital support, the program provides a sales-linked incentive that will be awarded through a competitive bidding process based on the lowest quoted incentive rate following technical qualification.

The sales incentive is capped at ₹2,150 (~$23.09)/kg, subject to a 40% cap on net sales turnover, along with overall capacity-linked caps. Incentives will be disbursed over five years based on production and sales performance.

The capital subsidy and sales incentives will be disbursed only after all prescribed milestones are met, the full allocated capacity is commissioned and verified, and a completion certificate is issued.

Bidders must secure the supply of neodymium-praseodymium oxide. Limited supply support may be available from Indian Rare Earths only for select top-ranked bidders (L1–L3), subject to defined allocation limits. However, bidders cannot make their proposals contingent on such supply, and no relaxation of project timelines will be granted in the event of raw material constraints.

Last November, the Union Cabinet approved a program to promote the manufacturing of sintered rare earth permanent magnets with a financial outlay of ₹72.8 billion (~$815.73 million).

The government approved the National Critical Mineral Mission in January last year. This initiative has an estimated expenditure of ₹163 billion (~$1.88 billion) and an expected investment of ₹180 billion (~$2.07 billion) by public sector undertakings and other entities.