China's Rare Earth Magnet Curbs Continue To Disrupt Indian Auto Industry

(MENAFN- KNN India) New Delhi, Sep 18 (KNN) Despite diplomatic signals in July suggesting a possible easing of restrictions, China has yet to resume shipments of rare earth magnets to India.

The curbs, imposed on April 4 citing regulatory reasons, have left Indian automakers and component manufacturers grappling with supply shortages that are disrupting production.

The discussions in July between S. Jaishankar and Wang Yi had raised hopes of resuming trade, but no formal approvals have come through. Industry executives said suppliers in China are still awaiting clearance to dispatch consignments.

“Despite Beijing's indications, there has been no movement on the ground. Our suppliers are stuck, and we are urging Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association of India (ACMA) to escalate the matter,” said a senior executive of a leading original equipment manufacturer (OEM), reported FE.

Companies have approached the ministries of heavy industries, commerce and industry, and external affairs to seek intervention.

Officials tracking the matter also confirmed that no official communication has been received from Chinese authorities regarding any relaxation of the export ban.

The shortage has forced some OEMs to adopt costly stopgap measures by sending motor sub-assemblies to China for magnet integration before re-importing them. This process has slowed down production and raised costs.

Rare earth magnets are crucial in the automotive sector, particularly for electric vehicles. A conventional passenger car uses about 100 grams of these magnets, while electric cars require up to 3 kilograms and electric buses up to 30 kilograms.

ACMA president Shradha Suri Marwah said the industry is exploring long-term alternatives like ferrite-based magnets and magnet-less designs, but none are immediately viable.

Meanwhile, the government has announced a Rs 5,000 crore programme to build domestic capacity of 6,000 metric tonnes of permanent magnets.

(KNN Bureau)

MENAFN18092025000155011030ID1110081159