Updated: Tuesday, August 11, 2026
Key takeaways
- L&T is reported to be bidding for India’s rare-earth magnet incentive scheme
- Bids close August 12, 2026, after three deadline extensions
- The scheme offers ₹7,280 crore for 6,000 MTPA across up to five winners
- L&T already has Odisha approval for a ₹2,400 crore Ganjam plant
- China controls roughly 90% of refined magnet production globally
- Feedstock and refining capacity remain India’s unresolved bottleneck
Larsen & Toubro is preparing to bid for India’s ₹7,280 crore rare-earth permanent magnet incentive scheme, Bloomberg News reported, citing people familiar with the plans. The bid deadline set by the Ministry of Heavy Industries falls on Wednesday, August 12. India’s largest engineering and construction group already has state approval for a ₹2,400 crore magnet plant in Odisha. A win would place L&T at the centre of New Delhi’s push to break China’s grip on a critical technology.
This article is news reporting, not investment advice. L&T has not publicly confirmed the bid.
What happened?
Direct answer: L&T is reported to be joining the race for government support to manufacture rare-earth magnets in India, one day before bidding closes.
The Ministry of Heavy Industries extended the bid submission deadline from July 29 to August 12, with technical bids now scheduled to open on August 13 the third such extension since the tender was floated on March 20. Electronicsforyou
The ministry said the extension was meant to widen participation and give stakeholders more time to prepare proposals. Electronicsforyou
L&T’s interest is not entirely new. In June, the Odisha government cleared a ₹2,400 crore Larsen & Toubro investment in a sintered NdFeB permanent magnet manufacturing unit in Ganjam district. business-standard
Key facts at a glance
- Company: Larsen & Toubro Ltd (L&T), Mumbai-headquartered EPC and manufacturing group
- Scheme: Promotion of Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)
- Outlay: ₹7,280 crore, approved by the Union Cabinet on November 26, 2025
- Target capacity: 6,000 metric tonnes per annum (MTPA)
- Winners: up to five beneficiaries, each 600–1,200 MTPA
- Bid deadline: August 12, 2026; technical bids open August 13
What is the rare-earth magnet scheme?
Direct answer: It is a government incentive programme that pays companies to build complete magnet factories in India not just assembly lines.
The outlay comprises ₹6,450 crore in sales-linked incentives paid over five years and a ₹750 crore capital subsidy for setting up an aggregate 6,000 MTPA of manufacturing capacity. Bloomberg
The scheme runs seven years from the date of award, including a two-year gestation period to build an integrated facility and five years of incentive payouts on magnet sales. Bloomberg
What does “integrated” mean here? The facility must handle the full chain: converting rare earth oxides to metals, metals to alloys, and alloys into finished magnets. That distinguishes it from companies assembling magnets from imported materials. Bloomberg Electronicsforyou
There is also a raw-material sweetener. The three lowest bidders receive a limited assured supply of neodymium-praseodymium (NdPr) oxide from IREL (India) Ltd, the state-owned rare earth materials company. Electronicsforyou
Details here come from the Press Information Bureau, the Prime Minister’s Office website and All India Radio’s news service official government channels, making them primary sources.
Why does L&T want in?
Direct answer: Magnets fit a decade-long strategy of moving from building projects for others into owning manufacturing assets in strategic sectors.
Under its multi-year strategic plan, L&T has been divesting non-core assets such as road concessions and power, while pushing into green energy, cell and battery manufacturing, data centres, technology education and B2B e-commerce. business-standard
The group has also scaled a data centre business and expanded in defence and aerospace, according to Business Standard reporting.
Rare-earth magnets sit naturally alongside those bets. They are core components in electric vehicle motors, wind turbines, defence systems and industrial automation all markets L&T already serves as a contractor or supplier.
L&T describes itself as an Indian multinational engaged in EPC projects, hi-tech manufacturing and services, operating in more than 50 countries. Rare Earth Exchanges
Why does this matter for India?
Direct answer: India has the reserves but almost none of the processing capacity, and China controls nearly the entire finished-magnet market.
Despite holding the world’s fifth-largest rare earth reserves, India accounts for barely 1% of global production, while China commands close to 90% of refined magnet output. Almost all of India’s magnet demand is currently met through imports. business-standard
The vulnerability became concrete last year. China’s export curbs on rare earth magnets during trade tensions with the United States disrupted global supply chains and hit automotive and electronics sectors, including in India. business-standard
Government projections show India’s magnet consumption doubling by 2030, driven by electric vehicles, renewable energy, industrial uses and consumer electronics. Investment Guru
The scheme sits alongside the National Critical Mineral Mission, announced earlier with an outlay of ₹34,300 crore. business-standard
Heavy Industries and Steel Minister H.D. Kumaraswamy has said the programme will place India among an allied group of nations able to produce these components domestically, reducing import dependence and strengthening strategic autonomy. gulfnews
Union Minister Ashwini Vaishnaw said when announcing the Cabinet decision that India would become self-reliant in rare earth magnets within three to four years. gulfnews
Who else is bidding?
Direct answer: The tender is open globally, and at least one major foreign manufacturer has confirmed interest publicly.
Japan’s Proterial, owned by a Bain Capital-led consortium, told Bloomberg News in April that it was considering applying for the Indian government’s magnet manufacturing support scheme, declining to give further details. Bloomberg
Domestic competition is building too. N.A.N. Magnetech Private Limited received Odisha’s approval to invest ₹1,250 crore in an EV-grade NdFeB magnet facility in Khordha or Cuttack. business-standard
At a January stakeholder meeting chaired by Kumaraswamy, industry representatives outlined their capabilities and expressed interest in participating. newsonair
The repeated deadline extensions suggest bidders needed time. The first two extensions followed requests from stakeholders seeking more time to prepare, the ministry said. Electronicsforyou
Timeline of the scheme
| Date | Event |
| Nov 26, 2025 | Union Cabinet approves the ₹7,280 crore REPM scheme |
| Jan 12, 2026 | Kumaraswamy chairs stakeholder consultation in New Delhi |
| Mar 20, 2026 | Global tender issued; bids originally due May 28 |
| Apr 1, 2026 | Proterial confirms it is considering an application |
| Apr 7, 2026 | Pre-bid conference held |
| Jun 17, 2026 | Odisha clears L&T’s ₹2,400 crore Ganjam magnet plant |
| Jul 29, 2026 | Third deadline extension, to August 12 |
| Aug 11, 2026 | L&T reported to be preparing a bid |
| Aug 13, 2026 | Technical bids scheduled to open |
How the bidding works
Direct answer: It is a two-stage online process judged mainly on cost.
Bidding runs through the Central Public Procurement Portal using a two-stage Least Cost System — a technical bid followed by a financial bid. Electronicsforyou
Bidders must submit a detailed project report, financial statements and bid security, along with a tender fee of ₹450,000 and earnest money deposit of ₹10 million. newsonair
Roughly 89% of the scheme’s value is weighted toward sales-linked incentives, disbursed only on actual production a design meant to avoid the stalled-project problem that dogged earlier industrial policy efforts. deccanherald
Expert analysis: the hard part
Direct answer: Winning a bid is not the same as securing raw materials, and that gap remains India’s biggest unresolved problem.
Industry analysts have flagged the same weak link repeatedly. Commentary on the Odisha approvals noted that feedstock sourcing remains unaddressed, and that India’s separation, refining and metallization infrastructure is still limited compared with China’s integrated ecosystem. Prop News Time
The assessment concluded that magnet approvals signal downstream ambition but do not yet amount to a secure or operational rare earth supply chain. Prop News Time
That is the strategic logic behind the tender’s design. By requiring oxide-to-magnet integration and offering IREL feedstock to the lowest bidders, the ministry is trying to force the missing middle of the chain into existence rather than subsidise imports of Chinese alloy.
Raju Kumar, Partner and Energy Tax Leader at EY India, said support for magnet manufacturing could unlock opportunities across mining, processing, alloying and advanced materials. newsonair
Execution risk stays high. A two-year gestation period means no meaningful domestic output before 2028 at the earliest.
Latest updates
- Bids close Wednesday, August 12, with technical bids opening the following day
- L&T has not issued a stock exchange filing confirming a bid as of publication
- Its Odisha plant approval formed part of 20 projects worth ₹76,612 crore cleared by the state’s High-Level Clearance Authority business-standard
- That approval round was chaired by Chief Minister Mohan Charan Majhi Construction World
What happens next?
Three checkpoints follow quickly.
August 13. Technical bids open, revealing which companies actually filed. Names become public at this stage.
Award of capacity. Up to five winners split 6,000 MTPA, with financial bids deciding the ranking under the Least Cost System.
The build phase. Winners get two years to construct integrated facilities before incentive payments begin against actual sales.
FAQ
What is L&T reportedly bidding for?
Bloomberg News reported that Larsen & Toubro plans to bid under India’s ₹7,280 crore scheme for sintered rare-earth permanent magnets. Bids close August 12, 2026, with technical bids opening the next day.
How much support does the scheme offer?
The programme provides ₹6,450 crore in sales-linked incentives over five years plus a ₹750 crore capital subsidy, supporting 6,000 metric tonnes per annum of integrated magnet manufacturing capacity across up to five winners.
Why does India need domestic magnet production?
India holds the world’s fifth-largest rare earth reserves but produces roughly 1% of global output. China controls nearly 90% of refined magnet supply, a dependence exposed when Beijing imposed export curbs.
Does L&T already make rare-earth magnets?
No. The Odisha government approved a ₹2,400 crore L&T sintered NdFeB magnet plant in Ganjam district in June 2026, but the facility has not been built. The company’s core business remains engineering and construction.
When would Indian-made magnets reach the market?
Not before 2028 at the earliest. The scheme allows a two-year gestation period to build integrated facilities, followed by five years of incentive payments tied to actual magnet sales.
Conclusion
India has spent a year building the policy scaffolding for a domestic magnet industry. The tender closing Wednesday is where that scaffolding meets real corporate capital.
If L&T files and wins the question shifts from whether India can attract bidders to whether it can supply them with the raw material the whole plan depends on.
