Magnetising Independence: Mahindra, Uno Minda Move to Break China’s Rare Earth Grip with Local Production Push

Unknown Apr 02, 2026 1,100 Views

Key Highlights Indian automotive giants Mahindra & Mahindra and Uno Minda are taking decisive steps to establish domestic rare earth magnet production, aiming to reduce India’s heavy reliance on China—a country that currently controls about 90% of global supply. Thi...

Key Highlights

Indian automotive giants Mahindra & Mahindra and Uno Minda are taking decisive steps to establish domestic rare earth magnet production, aiming to reduce India’s heavy reliance on China—a country that currently controls about 90% of global supply. This strategic move comes as China’s recent export restrictions on rare earth magnets threaten to disrupt India’s fast-growing electric vehicle (EV) and electronics sectors.

Why Rare Earth Magnets Matter

Rare earth magnets are essential for EV motors, electronics, and defence systems. With over a dozen new electric models set to launch in India in the next 12–18 months, and most built on Permanent Magnet Synchronous Motor (PMSM) platforms, any supply disruption could stall manufacturing and innovation.

Despite rare earths contributing less than 5% to a vehicle’s cost, they are indispensable for critical components like electric power steering and drive motors.

India’s Push for Self-Reliance

The Modi government is considering a Rs 25 billion incentive plan to encourage private-sector magnet manufacturing, alongside stockpiling and efforts to secure raw materials from countries like Vietnam, Japan, and Australia.

To qualify for incentives, manufacturers must source at least 50% of the magnet’s value from locally processed neodymium-praseodymium oxide, rising to 80% by year five.

Mahindra is open to partnerships or long-term contracts with local producers, while Uno Minda, a major supplier to Maruti Suzuki, has also expressed interest in setting up domestic manufacturing.

Challenges and Opportunities

India holds the world’s fifth-largest reserves of rare earth minerals, but most extraction and processing are managed by state-run IREL, with much output reserved for nuclear and defence use.

IREL is now preparing to halt exports and ramp up domestic processing to support downstream industries like magnet manufacturing.

Sona Comstar was the first Indian company to announce plans for local magnet production, highlighting growing industry momentum.

Outlook

With government incentives and industry interest aligning, India could see its first wave of locally produced rare earth magnets within the next year or two. This would not only protect the country’s EV and electronics sectors from global supply shocks but also position India as a serious player in the critical minerals value chain.

Sources: Economic Times, Financial Express, Business Standard

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