The Center has relaxed localization requirements under its Electric Vehicle Manufacturing Programme, which has faced component supply challenges for electric bus and truck makers. The move comes under the government’s Rs 10,900-crore PM E-DRIVE scheme, which aims to boost domestic EV production while strengthening the supply chain for key components. In a notification issued on March 13, the Ministry of Heavy Industries allowed manufacturers to import traction motors using rare earth magnets for electric trucks and buses till August 31. The decision is expected to help manufacturers meet ongoing shortages of components while continuing to build local production capacity. This is the second time the government has extended the timeline for localization of traction motors. In September last year, the Center had already extended the deadline to March 2026. With the latest notification, the requirement to fully localize the manufacturing of traction motors will now come into effect from September 1, 2026. Under the Phased Manufacturing Program (PMP) linked to the PM Electric Drive Revolution in Innovative Vehicle Enhancement Scheme, companies are required to carry out key stages of traction motor production within India. These processes include magnet fitment, rotor assembly installation, stator assembly integration, shaft and bearing fitment, enclosure installation, as well as connectors and cable integration. These requirements are intended to gradually increase domestic value in the EV supply chain. However, the acquisition of rare earth magnets has been a major challenge globally. These magnets are a key component in traction motors used in electric vehicles, and are also widely used in fields such as electronics, aerospace and renewable energy. India, like many other countries, currently relies heavily on imports for these materials, with China being one of the largest suppliers to the global market. To reduce this dependence, the government is also working on strengthening domestic manufacturing of rare earth components. As part of this effort, the Center has introduced a scheme to promote manufacturing of Sintered Rare Earth Permanent Magnet with a financial outlay of Rs 7,280 crore. The move is aimed at local production of these critical materials and securing the supply chain for India’s growing EV and technology industries. The latest decision to temporarily relax localization norms is expected to give manufacturers additional time to stabilize production while the country gradually builds the capacity needed to manufacture key EV components locally. Input from PTI.
