Indian automaker Mahindra & Mahindra and automotive components maker Uno Minda are exploring opportunities to manufacture rare earth magnets domestically, according to sources familiar with the matter. The move comes as China, which controls roughly 90% of global rare earth magnet production, has restricted exports since April, prompting delays and uncertainty for Indian manufacturers.
With the Indian government working on incentives to encourage local magnet production, companies like Mahindra and Uno Minda are reportedly assessing potential investments. A senior government official said that while domestic production could take one to two years, establishing an independent supply chain is a strategic priority.
During a recent meeting with India’s Ministry of Heavy Industries, Mahindra expressed willingness to either partner with a local manufacturer or enter into long-term supply contracts. The company, which recently introduced two electric SUVs, has ongoing magnet demand and considers the required investment for domestic production to be manageable, a source added.
Uno Minda also showed interest in local magnet manufacturing during the same meeting, joining other companies such as Sona Comstar, which was the first to express such intent in June. Sona Comstar supplies motors and gears to global players like Ford and Stellantis.
While India holds the world’s fifth-largest reserves of rare earth minerals, limited mining output remains a challenge. The sector is currently controlled by IREL, a government entity, which plans to halt exports and focus on expanding domestic mining and processing. In 2024, IREL produced around 2,900 tons of rare earth ores, primarily for atomic and defense use.
JSW Steel has also shown interest in rare earth mining but awaits government clearance, with sources indicating that mining operations could take several years to begin.
India is also seeking alternative raw material sources abroad. IREL dispatched a team to Myanmar last December and is collaborating with five Central Asian countries to explore joint mining projects for critical minerals.
Final investment decisions by Mahindra and Uno Minda are expected to depend on the structure of government incentives and the availability of raw materials.