New heavy industries secretary to steer EV push

Why does one person heading both ministries matter?

Until now, India's steel and clean-vehicle supply chains were run by two separate secretaries. Giving one officer, Sandeep Poundrik, charge of both ministries means a single person now administers EV subsidies, battery factory incentives and rare earth magnet plants alongside steel, allowing coordinated oversight of the entire chain India's electric-vehicle push depends on.

Why is India trying to make its own rare earth magnets?

China controls about 60% of rare earth mining and 90% of processing capacity. India has the raw material, monazite beach sand, but lacks the downstream skills to turn it into magnets. The ₹7,280 crore scheme aims to build 6,000 tonnes of integrated magnet capacity by 2026, reducing dependence on Chinese imports, which currently meet 85–90% of India's volume demand.

Why can't India just scale up its existing rare earth plants?

India's state-run IREL already produces around 400 tonnes of NdPr oxide annually, enough for roughly 1,150 tonnes of magnets, but it exports most of it because domestic downstream capability is missing. The bottleneck is sintering, the step that turns oxide into finished magnets, which requires specialised machinery and process know-how at 1,000-tonne scale. The new ₹7,280 crore scheme is designed to bridge exactly this gap by building integrated plants, though IREL alone cannot fill it because magnet making calls for private-sector expertise and scale it does not have.

What actually stops India from making its own magnets today?

India already has the raw material and produces about 400 tonnes of NdPr oxide a year, enough for roughly 1,150 tonnes of magnets, but exports most of it. The missing step is sintering, the high-temperature, high-pressure process that turns oxide into finished magnets. Doing this at commercial scale needs specialised machinery and know-how that only China has mastered, and India's labs can only produce small batches for defence. The ₹7,280 crore scheme is designed to bridge exactly this gap by building integrated plants.

What does sintering actually involve, and why is it so hard to replicate at scale?

Sintering compacts neodymium-iron-boron alloy powder under high temperature and pressure to form finished magnets. India can do it in small batches for defence through labs like BARC and DMRL, but doing it at the 1,000-tonne scale the scheme demands requires specialised machinery and process know-how that China has spent decades perfecting. No Indian company has yet operated sintering at commercial scale, which is why the scheme's success hinges on transferring or acquiring that expertise quickly.

Can India actually build its own battery cells?

The PLI ACC scheme promised 50 GWh of cell capacity, but by March 2026 only 1 GWh of the 40 GWh awarded was installed. Delays stem from a lack of mature ecosystem, visa issues for Chinese technicians, and tough timeline rules. Our read: the real test is whether Ola's Gigafactory (its battery plant) scales from 2.5 GWh to 6 GWh by March 2026.

How will five magnet plants actually get built by 2026?

The scheme follows a strict timeline: bids opened on 13 August 2026 after an RFP in March, with five beneficiaries selected to each build up to 1,200 MTPA of capacity. Winners get a two-year gestation period to set up facilities, then five years of sales-linked incentives. A July 2026 industry assessment flagged that limited rare earth magnet availability already constrained EV sales during 2026, so the government is running the process in parallel with budget-funded rare earth corridors in four states to speed up the supply chain from mining to finished magnets.

Can five companies scale up the magnet know-how in just two years?

The scheme gives winners a two-year gestation period to set up integrated facilities, then five years of sales-linked incentives. Indian labs like BARC and DMRL have developed pilot processes, and one firm, Ashvini Rare Earth, has started commercial metallisation using a BARC-developed process with 180 tonnes annual capacity. But scaling from 180 tonnes to 1,200 tonnes per plant requires machinery and process expertise that India has never deployed at that scale, so the technical risk is the real challenge, not the timeline itself.

Did the two-wheeler EV subsidy end or not?

No, the subsidy was extended. The PM E-Drive scheme (a government subsidy for electric two-wheelers) was due to end March 31, 2026, but was pushed to July 31, 2026, and then again to March 31, 2028. However, the maximum incentive per vehicle was halved from ₹10,000 to ₹5,000, so buyers now get less money off.

What stands between India and a working magnet plant?

India has the raw material: monazite beach sand is mined and refined into rare earth oxides by the state-run India Rare Earths Limited, which produces about 400 tonnes of neodymium-praseodymium oxide a year. But making a sintered magnet needs four stages, from oxide to metal to alloy to magnet, and India only recently began the second stage at commercial scale, with one private plant able to make 180 tonnes of metal annually. The government's ₹7,280 crore scheme opened bidding in March 2026 and received 20 bids by August, so the missing link is now downstream skill and scale, not raw supply.

Why is India's magnet push so dependent on Chinese know-how?

Making a sintered magnet takes four stages: oxide to metal to alloy to finished magnet. India has only recently started stage two, metallisation, with one private plant at 180 tonnes a year. Scaling to the thousands of tonnes the scheme targets requires specialised machinery and process know-how that Chinese firms have spent decades perfecting. The magnet scheme explicitly wants to build the full chain, but the evidence does not say where that machinery or expertise will come from. Our read: the bottleneck is not raw material but the industrial skill to run these plants at scale.

Can the new magnet plants survive without Chinese equipment?

The evidence does not settle that question. What it shows is that every gap in the chain, from metallisation to sintering, is exactly where Indian capability is thinnest. When batteries under the PLI ACC scheme hit the same wall, visa delays for Chinese technicians and a lack of a mature ecosystem slowed installations to a fraction of the target. The magnet scheme is newer, and no evidence tracks its equipment sourcing. Our read: the plants will likely rely on Chinese machinery and technicians at first, making the 2026 start date close to the edge.

Did EV sales fall when the subsidy was cut?

No. In the financial year 2025-26, electric car registrations nearly doubled, up 91.3% to 193,633 units, and electric two-wheeler sales grew 21.8% to 1.40 million units. This happened even as the two-wheeler incentive was halved to ₹5,000 per vehicle, because more models, easier financing and fears of future price hikes kept demand strong. The market is growing as the subsidy shrinks.

Why does India need to build the magnet supply chain itself?

India has the raw material, monazite beach sand, but lacks the downstream skills to turn it into sintered magnets. The country currently depends on China for 85–90% of its magnet volume, and with demand expected to double by 2030, the ₹7,280 crore scheme aims to build 6,000 tonnes of integrated capacity by 2026. The scheme is a first-of-its-kind initiative to cover the full value chain, from oxides to finished magnets, reducing import dependence and securing supply for EVs, wind turbines, and defence.

What is India actually missing to make magnets itself?

India cannot skip the middle steps between mining and finished magnets. It already produces rare earth oxides from monazite sand, but the critical missing stages are metallisation, where oxides become neodymium metal, and sintering, where that metal becomes a magnet. Only one private plant, Ashvini Rare Earth, has recently begun metallisation at 180 tonnes a year, while sintering capability at commercial scale does not yet exist. The scheme funds the full chain, but each stage needs its own factories and know-how.

What is holding India back from making magnets at scale?

India has the raw material and can produce oxides, but the missing steps are metallisation and sintering. Only one private plant, Ashvini Rare Earth, has started metallisation at 180 tonnes a year. Sintering, which turns metal into finished magnets, has no commercial-scale plant yet. The ₹7,280 crore scheme, approved in November 2025, aims to build 6,000 tonnes of integrated capacity through five beneficiaries, with a two-year gestation period. Our read: the real bottleneck is process know-how, not funding.

Who pays if the magnet plant builders fail to deliver on time?

The scheme allocates 1,200 tonnes of capacity to each of five beneficiaries, selected through global competitive bidding. If a winner misses the two-year gestation period, the government holds them to the bid through performance obligations, and the incentive payout is tied to actual sales of finished magnets over five years, not just capital expenditure. Capital subsidies are combined with sales-linked incentives, so the state's money flows only when production happens. Our read: the discipline rests on bidders committing real equity, since the government is exposed to project failure before any incentive is paid.

What happens if a bid winner misses the two-year deadline?

The scheme's RFP was issued on 20 March 2026 and bids closed 12 August 2026, so winners are just being chosen now. Each of five beneficiaries is allotted up to 1,200 tonnes per year and gets two years to build an integrated plant. If a winner misses that deadline, the government holds them to the bid through performance obligations, and incentive payout is tied to actual sales of finished magnets over five years rather than capital spent. Our read: the penalty pressure is real because the government's money flows only after production, keeping bidders financially committed.

Why does the government see the new secretary as the right person for the job?

Sandeep Poundrik, a 1993-batch IAS officer, previously served as joint secretary in petroleum and as an additional chief secretary in industries, and has an M.E. in electrical engineering, according to the evidence. His new role as heavy industries secretary, held alongside his steel ministry position, puts him in charge of the magnet scheme and EV incentives that both ministries rely on. Our read: his engineering background and prior industry-facing roles are why the government trusts him to coordinate the steel and heavy industries push.

Why pick winners by bidding instead of inviting everyone?

A global competitive bidding process is used to select five beneficiaries, each allotted up to 1,200 tonnes per year of the 6,000-tonne target. The scheme is a first-of-its-kind integrated magnet facility covering the full value chain from oxides to finished magnets. Bidding lets the government set the terms for capacity, investment, and timeline without negotiation, and it keeps the selection transparent. The two-year gestation period is built into the scheme's seven-year total duration, with incentive disbursement over the remaining five years. Our read: bidding is meant to force serious, capable players to compete on cost and commitment rather than reward existing relationships.