L&T plans to manufacture rare-earth magnets in India to challenge China’s dominance
- IBEF
- August 12, 2026
Larsen & Toubro (L&T) is planning to bid for the Government of India’s incentive programme for domestic manufacturing of rare-earth permanent magnets, marking a potential expansion by the engineering major into a strategically important industrial segment. The company is preparing a bid under the Rs. 7,280 crore (US$ 764 million) incentive policy aimed at building domestic rare-earth magnet manufacturing capacity and reducing India’s dependence on imports. L&T would also need to secure a technology partner with specialised expertise in high-precision magnet manufacturing. The government programme has received 15 bids so far, including a consortium comprising Japan-based Proterial Ltd. and two Indian automakers. Rare-earth magnets are critical components used in electric vehicle motors, wind turbines, industrial robots and various electronic products, making domestic production important for strengthening India’s industrial supply chain.
The potential entry into rare-earth permanent magnets would diversify L&T’s operations beyond its traditional businesses such as construction, heavy engineering and industrial projects while supporting its plans to develop next-generation electric vehicle traction motors in India. L&T has partnered with Israel-based EVR Motors for its electric vehicle motor initiative, creating a strategic link between the company’s potential magnet manufacturing plans and its broader clean mobility ambitions. The move also aligns with India’s efforts to develop domestic capabilities in critical industrial components and reduce reliance on China, which accounts for around 90% of global rare-earth magnet production, according to the source. With rare-earth magnets playing an important role in electric mobility, renewable energy and advanced manufacturing, L&T’s potential investment could contribute to the development of a more resilient domestic supply chain and support India’s ambitions in emerging technology-driven industries.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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