Sona Comstar MD Raises Quality Concerns Over Rare Earth Magnets to be Produced under PLI Scheme

India’s leading auto component maker, Sona Comstar raised questions regarding the quality of rare earth permanent magnets (REPMs) that is slated to be produced under production-linked incentive (PLI) scheme of the Ministry of Heavy Industries’ (MHI).

While attending a meeting few weeks ago held with various stakeholders such as the MHI and the Department of Atomic Energy (DAE), the company’s Managing Director Vivek Vikram Singh requested the government to develop the testing infrastructure needed to ensure the quality of REPMs manufactured in the country under the proposed scheme.

A source familiar with the matter told Business Standard that ‘during the meeting, Singh raised concerns about the quality of magnets that will be produced in India under the scheme.’

Questions sent to Sona Comstar, the MHI and DAE regarding this matter remained unanswered till press time.

The remark from Singh came soon after, an executive from the Indian Rare Earths Limited (IREL) said that, the grade and quality of rare earth elements available in India are lower than those in countries such as China, during the meeting. Thereby, three additional refining steps are required when converting these elements into rare earth oxides, which increase production costs, the IREL executive pointed out, as per another source aware of the matter.

Operating under the DAE, the IREL is the only entity in India that mines rare earth element and refines them into rare earth oxides, the raw material that is extremely essential to make REPMs.

IREL, which operates under the DAE, is the only entity in India that mines rare earth elements and refines them into rare earth oxides, the key raw material used to make REPMs.

The PLI scheme proposed by the MHI focuses fully on providing financial incentives, including both capital subsidy and sales-based support, to winning bidders that set up manufacturing facilities capable of producing a total of 6,000 ton of REPMs in a year.

In order to produce 6,000 ton of REPMs on an annual basis, the winning bidders will require 1,500 ton of rare earth oxides. IREL has told the MHI that it can supply no more than 500 ton, which means that the remaining 1,000 ton will have to be sourced from abroad.

Speaking to BS, a government official stated that questions regarding the quality of REPMs are being raised because the rare earth elements available in India are of lower grade, and it remains unclear what quality of the remaining 1,000 ton will be sourced from overseas. The official further mentioned that, as a result the bidders want a standardised testing procedure to ensure a recognised quality benchmark so that when they sell REPMs to other entities, no doubts will be raised about quality.

During the meeting, Sona Comstar’s MD also requested the MHI and the DAE to establish a robust testing infrastructure in India to ensure that REPMs produced under the proposed scheme match the quality of those manufactured abroad.

China has restricted the export of REPMs to India since April 2025, thereby affecting production in the Indian automobile industry. REPMs are used in various auto components, especially in traction motors for electric vehicles.

Almost 90 per cent of global REPM production takes place in China. The country also leads in the production of rare earth elements and in the technology required to convert rare earth oxides into REPMs.