As China’s export restrictions pose new challenges to global supply chains, India’s manufacturing and mobility companies are acting quickly to lessen their reliance on rare earth magnets, an essential part of industrial robots and electric vehicle (EV) motors.

High-performance permanent magnet motors require rare earth elements like neodymium, dysprosium, which includes 15 silvery-white metals known as lanthanides, or lanthanoids, as well as scandium and yttrium. However, these elements are costly to extract and are largely controlled by China, which controls almost 90% of the world’s supply.

Two days after US President Donald Trump announced reciprocal tariffs on April 2, China imposed limitations on its exports of rare earth elements on April 4.  Since then, the weaknesses in India’s quickly expanding EV ecosystem have come to light.

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Permanent magnet synchronous motors, which require rare earth elements, are now the only method for creating an efficient motor.  China has almost complete control over the issues, which are well recognized, expensive, and challenging to mine.  Bhaktha Keshavachar, founder and CEO of Chara Technologies, a Bengaluru-based company, told Moneycontrol that it is wise for them to consider other options.

Chara has created synchronous reluctance motors that completely eliminate the need for rare earth magnets.

We already have very little reliance on rare earths, and we’re always looking for ways to lessen it.  Viable alternatives are gradually becoming available as more businesses enter this market, according to Gunjan Kapadia, co-founder and CEO of Sthyr Energy, a deeptech startup based in Chennai that was founded with researchers from IIT Madras to create long-lasting, secure, and reasonably priced zinc-air batteries.

Thanks to developments in electronics and control algorithms, Chara’s motors—once thought to be too complicated to implement on a large scale—are now being brought back to life.

Five years ago, we realized that India needed to stop relying on China.  In certain situations, our motors provide 10% more mileage than magnet-based motors while matching their efficiency and torque, according to Keshavachar.

With a facility in Peenya, Bengaluru, the company started exporting motors this year and anticipates a rise in sales from Rs 3 crore to Rs 30 crore in FY26.

“The current geopolitical tensions have made hesitant customers much more receptive,” he continued.

Other startups are changing course as well.  Ferrite motors are becoming more popular among Ati Motors, a manufacturer of autonomous industrial robots.

“At the moment, this is not cost-efficient, but it will be,” stated CEO and co-founder Saurabh Chandra.

India has been producing induction motors for many years.  The minor efficiency trade-off is no longer a deal-breaker because they don’t need rare earth magnets and battery prices are declining, Chandra continued.

While Ola Electric is developing ferrite-based alternatives, Ather Energy, a Bengaluru-based manufacturer of electric scooters, is revamping its motors to lessen reliance on heavy rare earths.

According to creator Bhavish Aggarwal, “the long-term strategy must be to leapfrog rare earth into rare-earth-free technology.”

Using internal research and development, Simple Energy, on the other hand, has become the first OEM in India to commercially manufacture heavy rare-earth-free motors at its Hosur factory.

One thing has become evident as a result of global supply chain interruptions and material dependencies: self-reliance is essential to the development of electric mobility in the future. Deep localization and a “Make in India” strategy are now necessities rather than goals, according to Suhas Rajkumar, CEO and co-founder of Simple Energy.

Companies worldwide are developing rare-earth-free designs, including those in the US, UK, Israel, and Canada.  New materials including tetrataenite, manganese-bismuth, and iron-nitride alloys are also being researched, though practical deployment is not expected for another ten years.

The challenge has been noted by the Indian government.

Industry participants met with the Ministry of Heavy Industries and Commerce Minister Piyush Goyal at the start of September to discuss incentives for promoting rare-earth-free technology in addition to mining.

We advised them to back alternatives as well as mining.  A founder who was aware of the events stated, “Both accomplish the same goal of supply chain independence, and the government has also taken note of our concerns.”

There are compromises associated with the change.

Chara’s three-wheeler motor weighs 18 kg, whereas a magnet-based motor weighs 15 kg. Rare-earth-free motors are typically bigger.  However, there is very little difference with a 750 kilogram autorickshaw.  As manufacturing expands, costs should also decrease.

Startups currently perceive the disruption as an opportunity.

The race to create substitutes has turned into a strategic imperative as well as a business opportunity due to the unstable global supply and India’s import of about 700 tonnes of rare-earth magnets this year.