The Ministry of Heavy Industries addressed Unstarred Question No. 1525 on December 12, 2025, regarding overcoming the shortage of rare earth magnets for EV production. The government acknowledges the automotive sector's, specifically electric and hybrid vehicles, import dependence on rare earth permanent magnets, which leads to supply chain vulnerabilities. To address this, the government is exploring alternative supplies of rare earth magnets and is strengthening domestic capability through the Production Linked Incentive (PLI) Scheme for Automobiles and Auto Components (PLI-Auto Scheme) by listing "rare earth magnets for xEV motors" as an Advanced Automotive Technology component and promoting domestic development of alternative (rare earth free) motor technologies and its components. Furthermore, the Union Cabinet on November 26, 2025, approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' with a financial outlay of Rs. 7280 crore to establish 6,000 Metric Tons per Annum (MTPA) of integrated Rare Earth Permanent Magnet (REPM) manufacturing in India. The Minister of State for Heavy Industries who provided the answer is Shri Bhupathiraju Srinivasa Varma. The question was posed by Dr. M. Dhanapal.
Key Entities Referenced
Production Linked Incentive (PLI) Scheme for Automobiles and Auto Components (PLI-Auto Scheme): A scheme to strengthen domestic capability by listing rare earth magnets for xEV motors as an Advanced Automotive Technology component.
Ministry of Heavy Industries: The government ministry responsible for addressing the shortage of rare earth magnets for EV production.
Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets: A government-approved scheme to establish integrated Rare Earth Permanent Magnet manufacturing in India.
GOVERNMENT OF INDIA
MINISTRY OF HEAVY INDUSTRIES
RAJYA SABHA
UNSTARRED QUESTION NO. 1525
ANSWERED ON 12.12.2025
OVERCOMING SHORTAGE OF RARE EARTH MAGNETS FOR EV PRODUCTION
1525. DR. M. DHANAPAL:
Will the Minister of Heavy Industries be pleased to state:
(a) whether Government has taken cognizance that auto components, particularly for electric
vehicles and hybrids, are highly dependent on magnets, especially rare earth magnets, causing
supply chain vulnerabilities, production delays, and increased costs for manufacturers in the
automotive sector;
(b) if so, the details of the steps proposed to be taken by Government to explore alternative
suppliers like Australia, Japan, Vietnam, Russia, allow imports of fully-built motors, and develop
domestic capabilities to bypass magnet shortages, ensuring uninterrupted production despite cost
increases; and
(c) if not, the reasons therefor?
ANSWER
THE MINISTER OF STATE FOR HEAVY INDUSTRIES
(SHRI BHUPATHIRAJU SRINIVASA VARMA)
(a): Yes. Government of India is aware of import dependence of the automotive sector,
particularly electric & hybrid vehicles, on rare-earth permanent magnets. This dependence has
lead to supply-chain vulnerability for OEMs utilizing rare earth magnets.
(b) & (c): Government is exploring alternative supply of rare earth magnets. Production
Linked Incentive (PLI) Scheme for Automobiles and Auto Components (PLI-Auto Scheme) is
strengthening domestic capability through listing “rare earth magnets for xEV motors” as an
Advanced Automotive Technology component and promote domestic development of alternative
(rare earth free) motor technologies & its components. Further, Union Cabinet on 26.11.2025
approved the 'Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets' with
a financial outlay of Rs.7280 crore to establish 6,000 Metric Tons per Annum (MTPA) of
integrated Rare Earth Permanent Magnet (REPM) manufacturing in India.
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