The Automotive Component Manufacturers Association of India (ACMA) has urged the government to formulate a national strategy on critical materials at a time when the automobile industry is facing a potential production disruption due to a rare earth magnet shortage.
There is a growing concern among automotive industry stakeholders in India over China’s decision to restrict exports of rare earth magnets since April, mandating special export licences.
As China controls over 90 per cent of global magnet processing, this move has halted imports to India, creating uncertainty for electric vehicle (EV) production.
“The limited availability of rare earth magnets remains a concern, underscoring the need for a national strategy on critical materials to secure the future of EV and
mobility manufacturing in India,” ACMA president Shradha Suri Marwah said on Tuesday.
Marwah emphasised the need for self-reliance, stating that while the industry is exploring alternative solutions, immediate challenges persist. She stressed that although companies are currently managing with existing inventories, the stock is limited and the situation could worsen.
“The government is very clear. The industry is very aligned. So we are getting stuck in certain specific areas and certain specific components, but I think the road maps are being made. We don’t want to be stuck in situations like this as a country and as an industry,” Marwah, who is the chairperson and MD of Subros, said.
ACMA director-general Vinnie Mehta echoed her concerns, calling the supply crunch a wake-up call and urging the industry to accelerate localisation efforts.
Despite supply chain disruptions and geopolitical tensions, India’s auto component industry remained resilient. It reported a turnover of $80.2 billion (₹6.73 lakh crore) in FY25, marking a 10 per cent growth over FY24. Component exports rose 8 per cent to $22.9 billion in FY24, while imports increased 7.3 per cent to $22.4 billion, largely from Asia.
Australia talks
India is in talks with Australia to secure rare earth minerals amid a global shortage triggered by Chinese export restrictions. Malini Dutt, trade and investment commissioner of New South Wales, said India could partner Australian firms on early-stage rare earth blocks.
Indian interest also extends to Australian copper resources, involving both private players and PSUs.
Supply risk
Reuters reported that the global supply of heavy rare earths is at risk amid intense fighting between a rebel army (Kachin Independence Army) and the Chinese-backed military junta over the town of Bhamo, in the hills of northern Myanmar.
Nearly half the world’s supply of heavy rare earths is extracted from mines in Kachin state, including those north of Bhamo, a strategically vital garrison town.
They are then shipped to China for processing into magnets that power electronic vehicles and wind turbines.
