India's leading electric bus and truck manufacturers are gearing up to formally request the government for an additional one-year extension on exemptions to import critical rare earth magnet motors, as supply chain disruptions from China continue to pose significant challenges. This move highlights the ongoing struggle to build a self-reliant domestic supply chain for advanced electric vehicle (EV) components.
Industry Seeks Deadline Extension Till March 2027
According to multiple industry executives familiar with the matter, manufacturers are planning to ask for an import relaxation until March 2027 under the central government's ₹10,900-crore PM E-Drive scheme. The current deadline for e-trucks and e-buses to switch to locally manufactured rare earth magnet motors is March 2026, which itself was an extension from an earlier date of 1 September 2025.
Major players including Tata Motors, Ashok Leyland, Eka Mobility, and Montra Electric are involved in deliberations to send a collective request to the Ministry of Heavy Industries (MHI). A formal communication is expected to be sent in the coming weeks, following discussions within the industry body, the Society of Indian Automobile Manufacturers (SIAM).
Persistent Supply Chain Bottlenecks
The push for an extension stems from unresolved supply issues. China's restrictions on exports of heavy rare earth magnets, which began in April, continue to create order backlogs for original equipment manufacturers (OEMs). Despite a recent thaw in diplomatic relations, the material flow has not normalized sufficiently.
A spokesperson for Pune-based Eka Mobility confirmed the ongoing challenges, stating that import restrictions persist and changing motor configurations or suppliers is a lengthy process. "Developing and industrializing alternatives to rare-earth magnet topologies involve significant R&D, testing, and validation, which typically takes at least two years before they can be introduced into the supply chain at scale," the spokesperson explained.
P.V. Satyanarayana, Chief Business Officer at Montra Electric, echoed this sentiment, noting that the industry and government are aware that the domestic supply chain needs more time to gear up for local production of these high-tech components.
High Stakes for PM E-Drive Scheme and Market Growth
The timing of this request is critical, coming right after the conclusion of India's largest electric bus tender for 10,900 buses. Companies like PMI Electro Mobility, Eka Mobility, and Olectra Greentech secured major orders, and fulfilling them hinges on a steady supply of motors.
The PM E-Drive scheme is a cornerstone of India's EV push. Approximately half of its total outlay is dedicated to electric trucks and buses, with ₹4,391 crore for e-buses and ₹500 crore for clean trucks. The scheme subsidizes over 14,000 e-buses and 5,500 e-trucks, offering substantial incentives per vehicle to boost adoption.
The demand for these commercial EVs is surging. Between January and December 2025, sales of electric buses grew by 20% to 4,335 units, while sales of electric heavy and medium goods vehicles skyrocketed by 147% to 555 units year-on-year.
Experts warn that any disruption in incentives could have severe repercussions. "Any disruption or withdrawal of this demand incentive would raise upfront costs, weaken Total Cost of Ownership (TCO) viability, and could force logistics operators to reassess e-truck adoption and pricing strategies," said Deepali Thakur, Senior Technical Manager at Smart Freight Centre India.
The industry's plea underscores the delicate balance between the ambitious 'Atmanirbhar Bharat' (self-reliant India) vision and the practical realities of building a complex, high-tech supply chain from the ground up, especially when dependent on a single dominant global supplier.
