India’s largest rare earth magnet importer, Sona Comstar, plans to establish a factory domestically to produce key magnet components for electric vehicles in response to the government’s push for indigenous manufacturing as a measure to address the supply risks brought by Beijing tightening export restrictions.
China produces approximately 90% of the world’s rare earth magnets and implemented export restrictions on magnets and various key minerals in April this year as a countermeasure against the United States’ tariff policies, impacting global automotive, aerospace, semiconductor, and military supply chains. Although China and the U.S. signed an agreement this month to expedite rare earth export approvals, governments and enterprises worldwide are still actively seeking alternative solutions.
According to Reuters, India, possessing the third-largest automotive market and the fifth-largest rare earth reserves globally, is devising new plans to encourage local magnet manufacturing to reduce dependency on China. Sona Comstar, located in Gurgaon, also known as Sona BLW Precision Forgings, is the first enterprise to announce a localization plan following the government’s new policy announcement.
Sona Comstar’s CEO, Vivek Vikram Singh, mentioned in an interview, “As the nation’s largest rare earth magnet importer, we are one of the most affected parties. We must focus on India’s self-sufficiency in magnets and are currently collaborating with the government to advance related matters.”
The company supplies gears and motors to car manufacturers like Tesla and Stellantis, having imported 120 metric tons of magnets from China in the previous fiscal year. Singh stated that the company will evaluate the scale of local investment based on India’s incentive plan and other factors, emphasizing that the company has the necessary funds, with revenue growth over the past five years increasing fivefold, surpassing $400 million.
Singh also acknowledged that any plans for rare earth extraction and processing would take years to implement and would not immediately alleviate dependency on China. Sona Comstar had initially planned to import 200 metric tons of magnets this year to meet the demands of electric vehicle customers, a segment that contributes around one-third of its total revenue.
The U.S. market currently accounts for approximately 40% of Sona Comstar’s revenue, surpassing India and Europe. Recently, the company acquired the business of India’s railway enterprise, Escorts Kubota, expanding its business footprint beyond the automotive sector and achieving diversification. The Indian market is expected to become the primary revenue source this year.
As the Chinese Communist Party imposed export restrictions on key minerals, some battery startups are actively developing alternative technologies based on local materials to reduce dependency on Chinese rare minerals.
Keith Norman, Chief Sustainability Officer of Silicon Valley startup Lyten, told Epoch Times that alternative technologies like lithium-sulfur batteries use sulfur, the tenth most abundant element in the universe, instead of cobalt and nickel, and utilize domestically refined lithium metal from the U.S., eliminating the need for imported materials.