Larsen & Toubro (L&T) is planning to manufacture rare-earth permanent magnets in India as the country seeks to build a domestic supply chain and reduce dependence on imports, particularly from China.
People familiar with the matter said L&T is preparing a bid for the government’s ₹7,280-crore incentive programme aimed at boosting domestic production of rare-earth magnets. The company is expected to seek a technology partner with specialised expertise in the high-precision manufacturing process.
The government programme has reportedly received 15 bids so far, including a consortium involving Japan’s Proterial and two Indian automakers. India aims to establish annual domestic production capacity of 6,000 metric tonnes through the seven-year programme, which includes ₹6,450 crore in sales-linked incentives and ₹750 crore in capital subsidies.
Rare-earth magnets are critical components used in electric vehicle motors, wind turbines, industrial robots and various electronic products. China currently dominates global production, accounting for around 90 per cent of output.
L&T’s potential entry into the sector would expand its business beyond construction, heavy engineering and industrial projects. The move also aligns with the company’s plans to develop next-generation electric vehicle traction motors in India through its partnership with Israel-based EVR Motors. The proposed investment could strengthen India’s manufacturing capabilities while supporting efforts to build a more resilient supply chain for critical technologies.