Facing a critical shortage of rare earth magnets due to restrictions imposed by China, India’s automotive industry is working with domestic and international companies to build a self-reliant magnet supply chain. Several firms, including Midwest Advanced Materials, Entellus Industries, and public sector enterprise Indian Rare Earths (IREL), have presented proposals to the Ministry of Heavy Industries, outlining plans to produce magnets within the country.
According to sources, Heavy Industries Secretary Kamran Rizvi has reviewed these proposals as part of the government’s broader strategy to develop indigenous capabilities in magnet production. Midwest Advanced Materials detailed its plan to manufacture 500 tons of rare earth magnets annually, with expectations to supply custom-made magnets to the industry by the end of 2026.
Entellus, a UK-based firm with major operations in India, also confirmed readiness to produce magnetic powder. However, it noted that manufacturing industry-grade magnets would take additional time.
IREL assured officials it could match China’s pricing once operations begin, although it acknowledged that India’s rare earth ore reserves are significantly lower than those in China, the US, and Australia.
The companies also pointed out that India’s magnet production had stalled over the past two decades, primarily due to the influx of cheaper Chinese imports. They have requested government incentives and financial support to revive local manufacturing.
In response, Secretary Rizvi urged the companies to present realistic timelines, cautioning that inaccurate projections could disrupt the production schedules of automakers relying on timely procurement. Industry stakeholders have echoed this concern, requesting firm supply commitments from potential local producers.
The shortage has intensified in recent months, with Indian automakers and component suppliers unable to secure Chinese government approvals for rare earth magnet imports. Efforts to arrange meetings with Chinese officials have yet to yield results, despite interventions by Indian authorities.
The supply crunch has hit key components dependent on rare earth magnets, including electric motors, e-axles, ignition coils, sensors, and automatic transmission kits. Applications for sourcing magnets have been submitted by major parts manufacturers, but the lack of clarity from China has forced the industry to accelerate efforts toward domestic production.
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