Imports of finished and unfinished permanent magnets, which are largely made of rare earth metals, fell to 16,281 tonnes in the April-September period, a 56% drop from a year earlier, according to Commerce Department data.
That’s the steepest six-month decline in seven years. In the financial year 2025, the inbound supply of such magnets increased by 83% to almost 53,000 tonnes.
Yet 88% of all permanent magnet imports came from China in the first half of the fiscal year, again highlighting the country’s near-monopoly on the global supply chain.
While the gradual shift towards light Imports of rare earth magnets have dampened Indian carmakers, with imports expected to pick up from the second half as the Chinese government has started awarding applications to Indian firms for heavy rare earths.
Automakers are among the biggest users of rare-earth magnets, which are essential components of electric vehicle engines and other electronic vehicle components. Comments from some leading figures in the auto industry over the past month suggest that a permanent shift from heavy to light rare earths is underway.
“Over the past few months, many companies have turned to alternatives such as lightweight rare earth magnets, which has helped soften the blow,” Hemal N Thakkar, practice leader and director at Crisil Intelligence, an industry analytics firm. “Companies have also started working on motors with non-rare earth magnets, reflecting the decision that there is no turning back now and risking supply chains for such components.”
Rakesh Sharma, Managing Director at the company Bajaj Auto Ltd, which has turned to light rare earths to solve production woes, said during a Nov. 7 post-earnings media call that the company had learned from the rare earth crisis.
“Once we experienced that … and we were actually penalized a little bit more because we were on a higher growth trajectory and demand was way ahead of supply and we were playing catch-up anyway … so we really hit it off,” Sharma said. “So I think we’ve learned that we have to expand our supply chain and de-risk.”
The country’s fourth-largest two-wheeler maker is now set to introduce ferrite magnets in its scooters to reduce dependence on China’s Ola Electric Ltd, which has won approval for the ferrite scooter.
Manufacturer of automotive components Sona Comstar, one of the largest suppliers of traction motors used in vehicles, also said the company has started to change its supply chain.
“In response (to the rare earth crisis), we have switched to alternative motor designs that do not rely on heavy rare earth magnets,” said Vivek Vikram Singh, managing director and group chief executive of Sona Comstar. “So now we also manufacture our motors using lightweight rare-earth magnets, and this quarter we also successfully developed, tested and validated a ferrite-backed rare-earth synchronous reluctance motor.”
According to Singh, such engines will also be a good solution for tricycles and light commercial vehicles.
Manufacturer of electric scooters Ather Energy Ltd has incorporated lightweight rare earth materials but is cautious about moving to ferrite motors, whose effectiveness has yet to be proven in real-world scenarios.
Lightweight rare-earth magnets can be a good alternative to heavy rare-earth magnets because the supply chain is relatively diversified, said Tarun Mehta, co-founder and CEO of Ather. Mint in a previous interview.
“The industry has a way to overcome this (Chinese monopoly). Stop using heavy rare earth magnets. Unlike cars, trucks or buses, our industry can make motors without using heavy rare earth magnets,” Mehta said. “We can move towards lighter rare earth magnets.”
The government also supports the change. Mint announced on 22 November that the Union Cabinet was expected to approve a ₹7,300 crore for domestic production of rare earth magnets over the next month with firms like Sona Comstar, JSW Group and Among others, Bharat Forge is showing interest.
But all this will not immediately reduce India’s dependence on Chinese rare earth magnets.
As EV volumes pick up, imports will rise until alternatives are developed, a period of at least 2-3 years as it involves research, development, prototyping, testing and validation, said Thakkar of Crisil Intelligence.
