Industry warns vehicle manufacturing may halt by early june due to critical shortage of rare earth magnets from China
Indian automobile production is on the brink of disruption due to China’s newly imposed export restrictions on rare earth magnets—key components used in vehicles, home appliances, and clean energy technologies, reported reuters.com.
Industry appeals to modi government for urgent intervention to avert production crisis. Beijing introduced new export rules in April requiring companies to obtain permits for magnet exports, impacting global automakers.
For India, which imported 460 tons of rare earth magnets in FY2024 and plans to import 700 tons this fiscal, the timing is critical. According to documents reviewed by Reuters, Indian component manufacturers may run out of inventory by the end of May, potentially halting vehicle production in one of the world’s largest auto markets.
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The Society of Indian Automobile Manufacturers (SIAM) and the Auto Component Manufacturers Association of India (ACMA) have urged the Indian government to intervene with Chinese authorities
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They have requested expedited processing of shipments stranded at Chinese ports since April 4 and faster domestic approvals, including critical end-use certification that confirms non-military usage
Growing confusion around curbs disrupts even low-end magnet exports to india. While China’s measures were originally aimed at high-performance magnets, confusion at customs has affected low-grade shipments as well.
China’s exports of permanent magnets dropped 51% year-on-year in April. Indian companies say even though these magnets make up a minuscule portion of vehicle costs, the absence of a single component could halt entire production lines.
The SIAM document calls for Indian authorities to approve import applications “within hours” and to pressure Beijing and the Chinese embassy in New Delhi to process permits urgently.
China’s embassy responded that it is “actively facilitating compliant trade,” stating that the curbs are intended to “safeguard national security and interests.”
Meanwhile, major automakers like Tata Motors, Mahindra, and Maruti, along with relevant Indian ministries, have not issued official responses.
