Tata Motors Unfazed by China’s Rare Earth Export Curbs; India Eyes Strategic Shift in Supply Chain

In light of China’s tightening grip on rare earth metal exports, Tata Motors, India’s largest electric vehicle (EV) manufacturer, has stated that its operations remain unaffected. In a recent interview with a media publication, Tata Sons Chairman N. Chandrasekaran confirmed that the company has maintained stable supply lines and strategic inventories, with no disruptions reported.

Also Read: Indian Auto, Component Makers Yet To Get Approval For Rare Earth Materials From China

The statement comes amid growing global concerns over China’s dominance in the rare earth supply chain, particularly regarding the export of neodymium and dysprosium, which are crucial for manufacturing electric vehicle (EV) motors. While China accounts for roughly 36 per cent of the global mining of rare earth elements, it processes close to 90 per cent of these minerals, effectively wielding substantial influence over global supply. 

Chandrasekaran highlighted that Tata Motors has been proactively securing alternate sources for rare earth elements, reinforcing its resilience against potential geopolitical and trade disruptions. He reiterated the company’s commitment to EV development as a key pillar of its growth strategy, both from a market leadership and national economic standpoint.

Also Read: Rare Earths Are the New Oil: Can India Build Its Own Supply Chain?

In a parallel move to streamline its operations and sharpen its strategic focus, Tata Motors is progressing towards a demerger that will result in two independently listed entities—one dedicated to commercial vehicles and the other to passenger vehicles, including its electric vehicle (EV) division. The split, expected to be completed by the end of 2025, aims to allow each business to pursue distinct growth opportunities, particularly in the green mobility space.

Tata Motors has laid out an ambitious target of achieving 30% EV penetration in its passenger vehicle segment by 2030. On the commercial front, the automaker is working to expand its electric bus portfolio under the government-backed PM e-Bus Sewa scheme. It is also developing hydrogen-powered trucks as part of a broader transition to alternative propulsion technologies.

Also Read: India Halts Rare Earth Exports To Japan, Amid Severe Crisis Due To China

The rare earth supply chain has come under renewed scrutiny following China’s export restrictions, which many analysts interpret as a countermeasure to escalating US trade tariffs. The move has prompted several governments—including India’s—to reassess their reliance on Chinese imports.

According to a Reuters report, the Indian government is formulating a production-linked incentive (PLI) scheme specifically for rare earth magnet manufacturing. Drafted by the Ministry of Heavy Industries, the proposal includes funding the gap between domestically produced and imported magnets to encourage local production and achieve price parity.

Also Read: Entire Indian Auto Industry “Will Get Seriously Impaired”: Rakesh Sharma

India possesses the world’s third-largest reserves of rare earth minerals, estimated at around 6.9 million tonnes. However, mining and processing remain limited due to low private sector investment. Currently, state-run Indian Rare Earths Ltd (IREL) handles most of the extraction, with supply prioritised for the atomic energy and defence sectors.

To bridge this gap, the government has launched the National Critical Mineral Mission, aimed at accelerating exploration and commercial utilisation of rare earth elements such as neodymium. Several new projects are underway to bolster domestic output, a move aligned with India's long-term goal of becoming self-reliant in critical mineral resources.