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Amid uncertainties regarding the supply of rare-earth magnets from China, the government is planning to send a team of automotive industry leaders to China to discuss the restoration of magnet supplies at the earliest. The delegation is likely to visit China within the next 2–3 weeks.
“We are trying to send a delegation—some stakeholders. They are showing interest. I think they want to go and discuss with China… I think probably another 2–3 weeks they will go,” Minister of Heavy Industries H.D. Kumaraswamy told reporters on Monday. However, the minister noted that government officials would not be part of the delegation.
Rare-earth magnets are key components in vehicle manufacturing, especially for electric vehicles. In April, China—which processes over 90% of these magnets globally—implemented stricter rules on exporting rare-earth magnets, requiring import permits. These changes were initially seen as a response to tariffs imposed by the U.S., but the impact is now rippling across global automotive supply chains.
The new regulations mandate exporters to secure government licenses and comprehensive end-use certificates from buyers prior to shipment. Although presented as procedural updates, these rules have significantly slowed down the clearance process. More than 30 applications have already been submitted by the Indian auto industry, with no clearances received yet, a senior industry executive said last week.
India’s automotive sector—especially its burgeoning electric vehicle manufacturing—is now facing potential disruption due to China’s tightened export controls on rare-earth magnets. Last week, OEMs reportedly informed government officials that the stricter rules could lead to production halts within days.
Industry experts warn that existing stockpiles of these critical minerals may last only a few days, potentially bringing production lines to a halt. Recently, Bajaj Auto warned that a shortage of rare-earth magnets could significantly impact its production plans by July if supply bottlenecks persist.
Though rare-earth deposits exist in India and other parts of the world, extraction and refining require significant investment and expertise. Alternative strategies—such as replacing rare-earth magnets with other materials—are also complex and time-consuming.
“We believe this could impact not only EVs but also ICE cars, as magnets are used in components such as e-axles, various sensors (brakes, wheels, oxygen, engine), steering assemblies, speedometers, speakers, etc.,” Nomura said in a recent report.
India’s largest carmaker, Maruti Suzuki, said there is no immediate production impact from China’s export curbs on rare-earth magnets and that it is in talks with the government on the matter.
This article first appeared on Autocar
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