Amid rising global supply chain disruptions, Indian automaker Mahindra & Mahindra and auto component major Uno Minda are considering setting up local manufacturing of rare earth magnets, sources told Reuters. The development follows China’s recent export restrictions—impacting nearly 90% of the world’s rare earth magnet supply—leading to delays and growing uncertainty for Indian manufacturers.
With the Indian government planning incentive schemes to boost domestic magnet production, both companies are reportedly evaluating investment opportunities. A senior government official noted that while local production may take one to two years to materialize, building a self-reliant supply chain is a strategic imperative for India’s automotive and industrial sectors.
In a recent meeting with India’s Ministry of Heavy Industries, Mahindra & Mahindra expressed readiness to either partner with domestic manufacturers or enter into long-term supply agreements for rare earth magnets. With two electric SUVs already in its portfolio, Mahindra has ongoing magnet requirements and views the investment needed for local production as feasible, according to a source familiar with the discussions.
Uno Minda also showed keen interest in setting up local magnet manufacturing at the same meeting, joining the ranks of companies like Sona Comstar—the first to signal such intent back in June. Sona Comstar currently supplies electric motors and gear systems to global OEMs including Ford and Stellantis.
Despite holding the world’s fifth-largest rare earth reserves, India’s limited mining output remains a bottleneck. The sector is monopolized by state-run IREL (India Rare Earths Limited), which plans to end exports and shift focus toward scaling domestic mining and processing. In 2024, IREL produced around 2,900 tonnes of rare earth ore, primarily for use in atomic energy and defense applications.
JSW Steel has also shown interest in entering rare earth mining but is awaiting government approvals. Industry insiders suggest it may take several years for mining operations to commence.
To reduce dependence on China, India is also exploring international collaborations. Last December, IREL sent a team to Myanmar and is currently working with five Central Asian nations on joint mining initiatives for critical minerals.
Final investment decisions from Mahindra and Uno Minda are likely to hinge on the structure of forthcoming government incentives and the assured availability of raw material supply.
