Larsen & Toubro (L&T) is planning to enter rare earth permanent magnet manufacturing in India, as the government accelerates efforts to establish a domestic supply chain for these critical industrial components. The engineering and infrastructure major is preparing a bid under the government’s ₹7,280 crore incentive programme for rare earth permanent magnets, according to people familiar with the matter. To establish manufacturing capabilities, L&T will also need to identify a technology partner with expertise in the high-precision processes required to produce permanent magnets.
L&T Targets New Growth Opportunity
The proposed move would take L&T into a new business segment beyond its established operations in construction, heavy engineering and industrial projects. At the same time, the initiative could complement L&T’s proposed investments in electric vehicle (EV) motors, which commonly use rare earth permanent magnets. By developing capabilities across the magnet value chain, the company could potentially strengthen its position in the expanding EV and advanced manufacturing sectors.
Government Pushes Domestic Magnet Manufacturing
The government’s incentive programme aims to establish 6,000 tonnes per annum (TPA) of integrated rare earth permanent magnet manufacturing capacity in India. The scheme includes ₹6,450 crore in sales-linked incentives over five years, ₹750 crore in capital support for advanced manufacturing facilities and a targeted 6,000 TPA integrated manufacturing capacity. Rare earth permanent magnets play an important role in several high-technology industries. They are used in EV motors, wind turbines, industrial robots, aerospace and defence equipment, as well as various electronic applications.
India Seeks to Reduce Import Dependence
China currently accounts for around 90% of global rare earth magnet production, making supply security a growing concern for manufacturers in India and other major markets. Consequently, India is seeking to develop a more integrated domestic ecosystem covering rare earth mining, processing, refining and magnet manufacturing. The government has also announced plans for dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu. These corridors are expected to support activities ranging from mineral extraction and processing to downstream manufacturing.
L&T Joins Growing Magnet Manufacturing Interest
L&T is not the only company exploring opportunities in India’s rare earth magnet industry.
Japan-based Proterial has announced plans to establish a ₹2,250 crore rare earth permanent magnet facility in Andhra Pradesh. Other Indian companies are also evaluating investments in the emerging segment. For L&T, entering the magnet business could create synergies with its engineering expertise and proposed EV motor activities. However, building a globally competitive rare earth magnet manufacturing industry will require reliable access to raw materials, processing technology, specialised equipment and a strong downstream customer base. As reported by manufacturingtodayindia.com, as India seeks to reduce its dependence on imported rare earth components, investments by major industrial companies could play an important role in developing a resilient domestic rare earth magnet supply chain.
