This Pune firm cracks rare earth code—but India’s magnet shortage persists

Last November, Vikram Dhoot, managing director of Pune-based Ashvini Magnets, began receiving an unusual flurry of calls and emails from Chinese companies. They wanted to collaborate, transfer technology and supply materials—without any active solicitation.

It wasn’t business as usual. Dhoot was used to an occasional inquiry every few months. The sudden attention puzzled him.

Then, in April, China imposed an export ban on rare earth magnets and had already stopped shipping metal-processing equipment. It dawned on Dhoot that the Chinese interest may have had more to do with his company’s secret project to make rare earth metals—a first for India.

“When I got those calls, I ignored them,” Dhoot recalled. “We were already working with the Bhabha Atomic Research Centre on a technology to make metals. It’s only later I realised they may have been probing our work. Now my industry friends advise me not to travel to China.”

On 11 October, Ashvini Magnets unveiled India’s first indigenous rare earth metals plant, marking a significant step in the country’s long quest for self-reliance in critical materials. The plant can produce 15 tonnes a month of both light and heavy rare earth metals, crucial inputs for a range of industries – from magnets and electronics to green energy.

The plant’s output of NdPr (neodymium praseodymium) metal will help meet 20-25% of the country’s requirement of the rare earth metal alloy typically required to make the most common NdFEB rare earth magnets. These have high magnetic strength and are used in applications such as EV motors, MRI machines, consumer electronics and industrial equipment.

The breakthrough, powered by BARC-developed technology and backed by a ministry of mines grant of ₹1.7 crore for small enterprises, crowns a project that’s been quietly in the works for five years.

“We didn’t look at the viability as we knew that securing metal-making was the immediate requirement then,” said Dr Anupam Agnihotri, director of Jawaharlal Nehru Aluminium Research Development and Design Centre, which monitors the funded companies.

Yet, even as Ashvini’s achievement showcases Indian scientific and engineering capability, it falls short of fixing a much larger bottleneck: the domestic shortage of rare earth magnets.

Strategic breakthrough

India’s magnet ecosystem is still heavily dependent on imports. There are two types of magnets—bonded and sintered. Ashvini, a two-decade veteran in making bonded magnets, produces those used in sensors and small motors. The high-powered sintered magnets, vital for electric vehicle (EV) motors and wind turbines, remain largely unavailable in India.

“This is an important achievement in the rare earth products supply chain,” said Sarada Mohanty, chairman and managing director-designate at state-owned IREL, India’s largest rare-earths miner. “Having these metals domestically will help us negotiate better with magnet makers.”

But the win comes with caveats. Ashvini’s rare earth metals are expected to be 15-20% more expensive than Chinese supplies—India simply lacks the economies of scale. However, Dhoot said he expects volatility in global prices to create room for local producers.

“We’re in talks with magnet users who want to buy our metals as a hedge against rising prices,” he said.

“If you look around today, there are at least three companies that have plans to make more powerful magnets and these metals will be put to use,” said Agnihotri.

The ministry of heavy industries is expected to announce a ₹7,500 crore incentive programme for rare earth magnet making in the country shortly. The proposal was made in early October this year. The scheme is aimed at making India self-sufficient in rare earth magnets over the next decade.

Sintered magnet bottleneck

Still, Ashvini, which posted revenue of ₹15 crore in FY24, may struggle to sell all the metal it produces. India currently has no sintered magnet-making capacity, and the technology to make them remains locked up in China and Japan. Japan guards its knowhow, and China has banned exports not just of the technology but also the processing equipment.

“For sintered magnets, we need ribbons of rare earth metal alloys,” Dhoot explained. “When we reach out to Chinese firms, they pretend the process doesn’t exist. That window is completely shut.”

For Ashvini’s metal-making venture to pay off, two paths exist: either domestic companies start producing sintered magnets or Ashvini itself takes that leap. The company is experimenting with making alloy ribbons indigenously, but scaling up would require significant funding, which is scarce for small manufacturers.

“Funding for critical areas like this is hard to come by,” Dhoot admitted. “Sintered magnets need a much larger capital outlay. If we can get that, we’re confident we can make them.”

A step, not a solution

Ashvini’s technology—developed with BARC—is 99% indigenous and proven viable at commercial scale. Dhoot won’t disclose the exact process but says it’s one of the two known methods: molten salt electrolysis or calcio-thermic reduction. China dominates the former, but both the technology and equipment for it are under export bans.

“Most experts can probably guess our process,” Dhoot said. “But we still need a few imported consumables, so it’s better not to make our own lives difficult.”

For now, Ashvini’s accomplishment marks a symbolic leap—proof that Indian innovation can push into frontiers long thought unreachable. Yet, until the country builds its own capacity to make high-powered magnets, the victory will remain more strategic than self-sufficient.