Magnet Shift: Sona Comstar Charts Local Rare Earth Production to Break China Dependence

Image Source : The Economic Times

In a strategic pivot aimed at securing its supply chain and supporting India’s self-reliance goals, auto component major Sona BLW Precision Forgings Ltd (Sona Comstar) has announced plans to locally manufacture rare earth magnets. The move comes in response to China’s tightening export controls, which have disrupted global magnet supplies and exposed vulnerabilities in India’s electric vehicle and high-tech manufacturing sectors.

Here’s a detailed look at the company’s roadmap, the policy backdrop, and the broader implications for India’s critical minerals ecosystem.

Key Developments and Strategic Intent

- Sona Comstar, one of India’s largest importers and users of rare earth magnets, is actively pursuing domestic production to reduce reliance on Chinese imports
- The company has re-applied for import permissions through diplomatic channels after China rejected a previous application under new export restrictions
- CEO Vivek Vikram Singh emphasized the urgency of building local capacity, citing the risk of production halts for key clients like TVS and Bajaj Auto if imports remain blocked
- The company is also exploring partnerships and technology tie-ups to accelerate magnet manufacturing capabilities

Policy Context and Government Support

- India is finalizing a ₹3,500–5,000 crore incentive scheme to promote domestic rare earth magnet production, expected to be announced within weeks
- The scheme will follow a reverse auction model, rewarding companies that offer the most cost-efficient production proposals
- Sona Comstar, along with Vedanta, Jindal, and Midwest Advanced Materials, has expressed interest in participating in the program
- The initiative is part of India’s broader critical minerals strategy, which includes halting rare earth exports to countries like Japan to prioritize domestic needs

Why Rare Earth Magnets Matter

- Rare earth magnets are essential for electric motors, wind turbines, medical devices, and defence systems
- China currently controls over 90 percent of global magnet production, giving it disproportionate leverage over global supply chains
- India holds 6.9 million tonnes of rare earth reserves—the fifth-largest globally—but lacks processing and magnet-making infrastructure

Industry Impact and Outlook

- Indian EV makers have warned that magnet shortages could disrupt production as early as mid-July 2025
- Sona Comstar’s move is expected to catalyze a broader shift toward domestic value addition in the EV and electronics sectors
- Midwest Advanced Materials is also set to begin production later this year, having secured mines in Sri Lanka and a tech partnership with IREL

As India races to build a resilient rare earth supply chain, Sona Comstar’s initiative marks a critical step toward industrial sovereignty—one that blends strategic foresight with manufacturing ambition.

Sources: The Hindu BusinessLine, Business Standard, The Economic Times, June 2025