Indian manufacturers of electric trucks and electric buses may seek another extension of exemption from localization rules under the ₹10,900 crore PM E-Drive scheme due to the continuing unavailability of locally made rare earth magnets, according to reports from Mint. If granted, this would be the third such waiver since localization rules were announced in March 2025. The exemption request stems from China's halt of rare earth magnet supply in April 2025 in retaliation for US tariffs, disrupting manufacturers' plans as they could not claim incentives on importing sub-assemblies of magnet-laden motors.
E-bus and e-truck makers, as part of the Society of Indian Automobile Manufacturers (Siam), discussed the issue on 23 July, according to the document containing the agenda of the meeting for Siam's electric mobility group, as reported by Mint. "Discussions have begun within the industry for this exemption, but no final decision has been taken yet," an auto industry executive said, requesting anonymity. Six-month extensions were granted in September 2025 and March 2026, with limited imports allowed by China and local rare earth magnets still unavailable.
In November 2025, India announced a ₹7,280 crore incentive programme to build 6,000 tonnes per annum of indigenous rare earth magnet making capacity, according to Mint. However, the government has continued to extend the tender closing date under this scheme owing to low interest. While electric two- and three-wheeler manufacturers can use alternative light rare earth magnets or magnet-less motors, larger vehicles such as electric trucks and buses require heavy rare earth magnets in their traction motors, which can be imported only from China.
Experts noted that localization of rare earth magnets may take time, citing China's dominance of the industry. The world's second-largest economy controls 60% of the world's rare earth mining capacity and 90% of the refining capacity, as reported by Mint. "At this point in time, major automotive hubs across the world are localizing their EV supply chains. And in India, too, this process is in progress, but may take more time, especially for rare earth magnets for e-trucks and e-buses," said Amit Bhatt, India managing director of the International Council on Clean Transportation.
The government has struggled to incentivize e-truck adoption under the PM E-Drive scheme, with only three such trucks subsidized, according to Mint. Although the government has sanctioned 13,800 e-buses to various cities and states out of a target of 14,028 e-buses, concession agreements have been signed only for 915 e-buses out of 2,000 e-buses allocated to Hyderabad and for 600 e-buses in Surat. Additionally, 200 e-buses have been approved for deployment in the hilly terrain of Jammu and Kashmir, as per a 21 July reply by the ministry of heavy industries in the Lok Sabha.
