MHI Extends Traction Motor Import Deadline to August 2026 Under PM E-DRIVE Scheme
The Ministry of Heavy Industries has relaxed localisation norms under the INR 10,900 crore PM E-DRIVE Scheme, allowing electric truck and bus manufacturers to import traction motors with rare-earth magnets until August 31, 2026.
March 17, 2026. By Mrinmoy Dey
MHI recently issued a notification extending the deadline for phasing out imports of traction motors used in e-trucks (N2/N3) and e-buses (M2/M3), addressing ongoing component supply constraints faced by the industry.
This marks the second extension of the localisation timeline. The mandate – originally deferred to March 2026 – has now been pushed further, with revised requirements set to come into force from September 1, 2026.
Under the Phased Manufacturing Programme (PMP) of the PM E-DRIVE Scheme, manufacturers are required to domestically undertake key processes in traction motor production, including magnet integration, rotor and stator assembly, shaft and bearing installation, as well as enclosure, connectors and cable fitment.
The latest amendment reflects the government’s balancing act: accelerating domestic manufacturing while acknowledging the current fragility in global supply chains, particularly for rare-earth magnets – critical inputs across EVs, electronics, aerospace and clean energy sectors.
To strengthen long-term self-reliance, the Union Cabinet, in November 2025, approved an INR 7,280-crore scheme to build India's first integrated manufacturing ecosystem for sintered rare earth permanent magnets, targeting 6,000 MTPA capacity through sales-linked incentives, capital subsidies, and a global bidding process for five manufacturers.
The total duration of the scheme will be 7 years from the date of award, including a 2-year gestation period for setting up an integrated REPM manufacturing facility, and 5 years for incentive disbursement on the sale of REPM.
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