Mahindra & Mahindra and parts supplier Uno Minda are exploring local manufacturing of rare-earth magnets to reduce heavy dependency on China. The move aligns with India’s proposed ₹2,500–5,000 crore incentive scheme for domestic production.
Source Image: economictimes
India Firms Edge Toward Self‑Reliant Magnet Manufacturing
India’s auto and parts industry is taking bold steps to mitigate its reliance on Chinese rare-earth magnets, vital for electric vehicles and electronics. Leading the charge are Mahindra & Mahindra and Uno Minda, which are considering setting up local production facilities or entering supply contracts with domestic magnet makers.
Key Drivers Behind the Shift
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Chinese Export Restrictions: China supplies around 90% of global rare-earth magnets and recently imposed export curbs, disrupting supply chains for Indian automakers.
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Government Incentives: India is preparing a production-linked incentive (PLI) scheme reportedly worth ₹2,500–5,000 crore to subsidize domestic magnet production and encourage private investment.
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Industrial Interest: Other industry players like Sona BLW, Vedanta Group, JSW, and Sona Comstar have also shown strong interest in developing local capacity under the proposed incentives.
Domestic Mining & Manufacturing Landscape
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Reserves & Mining: India ranks fifth globally in rare earth mineral reserves, though mining and refining are largely limited to state-owned enterprises like IREL. Domestic output historically supports defence and atomic sectors.
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Scaling Up: With export halts planned and mining operations expected to ramp up, India may soon transition from exporter to manufacturer of rare earth-based components.
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Supply Chain Diversification: Alongside domestic plans, India is exploring foreign sources, including Myanmar and Central Asia, to secure raw materials.
Challenges Ahead
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Resource Scale-Up Required: While reserves exist, India must significantly expand mining and processing capacities to meet industrial demand.
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Technology Gaps: Developing local magnet-making expertise still requires time and investment; partnerships or tech imports may be needed.
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Incentive Dependence: Firms are waiting to finalize investment decisions based on government support and raw material access.
Why This Matters
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Strengthens EV Ambitions: Local magnet production is crucial for India’s EV and clean-tech goals, reducing vulnerability to external shocks.
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Boosts Economic Security: Diversifying away from China enhances strategic autonomy in critical technologies.
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Creates Industrial Momentum: Multibillion‑rupee plans are drawing big private-sector interest, signaling a shift toward domestic manufacturing.
