KATHMANDU: Indian automakers are facing growing challenges in securing rare earth magnets from China, with industry experts warning of potential production disruptions within weeks, according to Bloomberg.
China, the world’s largest producer of rare earth minerals, has tightened export controls and introduced a new end-user certification process.
According to sources familiar with the matter, at least two applications for shipments bound for India have already been rejected, even as approvals were granted to subsidiaries in Germany and the US.
Shipments to Indian auto parts manufacturers have been stuck at Chinese ports since April 4, when China began enforcing strict export restrictions on seven key rare earth minerals. These include products such as magnets that contain even small traces of the restricted materials.
The rare earth magnets are especially vital for electric vehicles, where they play an essential role in motor and system functionality. A shortage, even of a single magnetized part, could halt vehicle production, industry officials warned.
Indian authorities and industry leaders are now pushing for urgent bilateral talks with China to resolve the issue.
The Society of Indian Automobile Manufacturers (SIAM) made a presentation on the issue on May 28, urging the Indian government to fast-track pending import applications and simplify the approval process. It added that some companies had received endorsements from the Chinese embassy, but final approvals from China’s Ministry of Commerce are still pending. As of now, none of the shipments approved by India have arrived.
Meanwhile, China’s export curbs are being viewed globally as a strategic move, with analysts saying the country is leveraging its dominance in the rare earth supply chain as geopolitical pressure. The recent restrictions follow rising trade tensions, including new US tariffs, and India’s cautious stance on Chinese investments.
The delay caused by China’s new certification process, which requires assurances that rare earths won’t be used for defense purposes or sent to the US, has led to a growing backlog, with the review process taking up to 45 days.
As the auto industry navigates this challenging landscape, automakers in India are also exploring alternative supply chains and design modifications to reduce reliance on China. However, stakeholders say that unless approvals are granted soon, shortages could severely impact vehicle production in the near term.
