Highlights

• India's Sona Comstar aims to launch domestic rare earth permanent magnet production to serve the growing electric vehicle market.
• The company currently imports 120 metric tonnes of rare earth magnets.
• Sona Comstar seeks to reduce dependency on Chinese imports.
• This initiative aligns with India's government manufacturing incentive scheme.
• The project addresses critical challenges in rare earth supply chain development.

India’s largest rare earth magnet importer, Sona Comstar (opens in a new tab), has announced plans to launch domestic production of rare earth permanent magnets to serve the growing electric vehicle (EV) market. The move marks a significant step for India’s self-reliance in rare earths and aligns with the government’s new manufacturing incentive scheme, introduced in the wake of escalating geopolitical tensions and China’s April 2025 export restrictions on critical minerals and rare earth magnets.

Sona Comstar currently supplies gears and motors to major auto OEMs such as Tesla and Stellantis, importing 120 metric tonnes of rare earth magnets last year and targeting 200 tonnes this year. The company’s CEO Vivek Vikram Singh (opens in a new tab) emphasized the strategic importance of building domestic capabilities, especially as EV clients now contribute roughly one-third of Sona Comstar’s $400+ million revenue.

The announcement follows a period of volatility. The company’s shares declined after the sudden death of Chairman Sunjay Kapur in June, though leadership continuity is expected under newly appointed Chairman Jeffrey Mark Overly. Sona Comstar is also undergoing a revenue pivot, with India projected to overtake the U.S. as its largest source of earnings following its acquisition of Escorts Kubota’s Indian railways business.

While India's ambition is commendable—backed by being the fifth-largest rare earth reserve holder globally—analysts caution that any new mining and processing infrastructure will take years. In the interim, domestic magnet manufacturing depends on recycled feedstock, imports, or interim supply deals, as the country lacks active separation and refining capacity at an industrial scale.

Critical Questions for Rare Earth Magnet Manufacturing in India:

1. Feedstock Security: Without an established mining-to-separation pipeline, how will India source sufficient quantities of Nd, Pr, Dy, and Tb to meet the demand for magnet manufacturing?
2. Processing Capability: Will India fast-track investment in rare earth separation and alloying technologies, or remain reliant on imported oxides and metals from China or other countries?
3. Recycling Integration: Can companies like Attero or other e-waste players supply the magnet-grade rare earths needed to bootstrap domestic production?
4. IP and Equipment Transfer: Does Sona Comstar have access to the necessary sintering and magnetization technologies, and will it license or develop this domestically?
5. Workforce and Infrastructure: What plans exist to develop a skilled workforce in magnetics and industrial clusters capable of precision manufacturing at scale?
6. China Dependency Mitigation: Will Sona Comstar’s near-term growth still depend on Chinese magnet imports while its domestic line scales, and for how long?
7. Policy Stability: Will Indian incentives for rare earth magnet production offer long-term consistency or remain reactive to geopolitical flashpoints?

Rare Earth Exchanges™ will continue to monitor this developing story as India attempts to build a resilient, localized rare earth magnet supply chain—one that could serve as a model for other rising economies looking to derisk from China.

For discussion, visit the Rare Earth Exchanges Forum (opens in a new tab).