Steep Decline in Chinese Magnet Imports
India witnessed a dramatic 56% reduction in permanent magnet imports during the first six months of financial year 2026, primarily driven by China's export restrictions and a strategic shift by Indian automobile manufacturers away from heavy rare earth dependencies. According to latest commerce ministry data, imports of both finished and unfinished permanent magnets plummeted to 16,281 tonnes between April and September, marking the most significant six-month decline in seven years.
Automakers Embrace Alternative Technologies
The automotive sector, being the largest consumer of rare earth magnets essential for electric vehicle motors and electronic components, has been actively pursuing diversification strategies. Industry leaders confirm a permanent transition from heavy to light rare earth magnets is well underway. Hemal N Thakkar from Crisil Intelligence noted that companies have turned to light rare earth magnets as cushioning alternatives and are increasingly exploring non-rare earth magnet motors.
Rakesh Sharma, Executive Director at Bajaj Auto Ltd, revealed during a November 7 earnings call that the company learned valuable lessons from the rare-earth crisis. "We actually got punished a little bit more because we were on a higher growth trajectory and demand was far ahead of supply," Sharma admitted, emphasizing their commitment to broad-basing and de-risking supply chains.
Industry-Wide Shift Towards Self-Reliance
Multiple automotive players are implementing concrete changes to reduce Chinese dependence. Bajaj Auto is exploring ferrite magnets for its scooters, mirroring Ola Electric's approach. Auto component manufacturer Sona Comstar has developed alternative motor designs that don't rely on heavy rare-earth magnets. Vivek Vikram Singh, MD and Group CEO at Sona Comstar, confirmed they've successfully developed, tested, and validated a rare-earth-free Ferrite Assisted Synchronous Reluctance Motor.
Electric scooter manufacturer Ather Energy Ltd has incorporated light rare-earth materials, though they remain cautious about ferrite motors whose real-world efficiency requires further validation. Tarun Mehta, Ather's co-founder and CEO, expressed confidence that the industry can build motors without heavy rare-earth magnets, moving toward lighter alternatives.
The government is supporting this transition with a proposed ₹7,300 crore domestic manufacturing scheme for rare earth magnets, expected to receive cabinet approval within the next month. Major industry players including Sona Comstar, JSW Group, and Bharat Forge have shown interest in participating.
Despite these developments, complete independence from Chinese rare-earth magnets remains a medium-term goal. Crisil Intelligence's Thakkar estimates that as electric vehicle volumes increase, imports will continue growing for at least 2-3 years until viable alternatives are fully developed, tested, and validated across the industry.
