L&T Plans Rare-Earth Magnet Manufacturing In India

Larsen & Toubro (L&T) is planning to manufacture rare-earth magnets in India, as part of its strategy to expand into a strategically important sector. The company is preparing a bid for the government’s ₹7,280 crore incentive programme aimed at developing domestic production of rare-earth permanent magnets.

The government’s programme has received 15 applications so far, including a proposal from a consortium involving Japan’s Proterial Ltd and two Indian automobile manufacturers. L&T will need to partner with a technology provider with specialised expertise in high-precision magnet manufacturing before entering the segment.

L&T’s potential entry into the rare-earth magnet sector marks a diversification beyond its traditional businesses, including infrastructure development, construction, heavy engineering and industrial projects. The move also supports the company’s broader plans in electric vehicle technology, where rare-earth magnets are essential components of traction motors.

Rare-earth permanent magnets are used across industries such as electric vehicles, wind energy, industrial robotics and electronics. China currently dominates global production, accounting for around 90% of output. Beijing’s restrictions on exports of these critical materials have encouraged countries, including India, to build alternative supply chains.

To boost local manufacturing, the government introduced a seven-year incentive programme with ₹6,450 crore allocated through sales-linked incentives and ₹750 crore through capital subsidies. The initiative aims to create domestic production capacity of 6,000 metric tonnes annually and support around five manufacturers.

The government expects the scheme to attract both Indian companies and international producers, helping reduce reliance on Chinese suppliers that have benefited from government support and large-scale manufacturing advantages. L&T’s rare-earth magnet plans are closely linked to its electric vehicle motor strategy, with the company having partnered with Israel-based EVR Motors to develop next-generation EV traction motors.

The development of a domestic rare-earth magnet industry is crucial for India’s electric vehicle and renewable energy ambitions. With the government’s support, companies like L&T are poised to play a key role in reducing the country’s dependence on Chinese suppliers and creating a sustainable supply chain for these critical materials.

In the long term, the success of this initiative will have a significant impact on India’s manufacturing sector, creating new opportunities for growth and employment. As the country continues to push for greater self-reliance in critical technologies, the development of a domestic rare-earth magnet industry will be a crucial step towards achieving this goal.

The government’s incentive programme and L&T’s plans to enter the rare-earth magnet sector are a testament to the country’s commitment to reducing its dependence on Chinese suppliers and creating a sustainable supply chain for critical materials. As India continues to grow and develop its manufacturing sector, the success of this initiative will be closely watched by industry experts and policymakers alike.

In conclusion, L&T’s plans to manufacture rare-earth magnets in India mark a significant development in the country’s efforts to reduce its dependence on Chinese suppliers and create a sustainable supply chain for critical materials. With the government’s support and the company’s expertise, India is poised to take a major step forward in the development of its electric vehicle and renewable energy industries.