India’s Auto Industry Sounds Alarm Over Rare Earth Magnet Shortage Amid China Export Curbs

India’s auto component industry is raising red flags over a growing crisis — a shortage of rare earth magnets used in electric vehicles (EVs) and high-end automotive parts. With China tightening exports of these critical materials, industry leaders are urging the government to develop a national strategy to secure supplies and avoid long-term disruption.

What’s Causing the Shortage?

Rare earth magnets, particularly those made from elements like neodymium and praseodymium, are essential in EV motors, sensors, and other precision parts. China currently dominates global production, controlling over 80% of the rare earth magnet supply chain.

Recent restrictions by China on the export of certain rare earth processing technologies and materials have sparked fears of global supply constraints — and India’s automotive sector is already feeling the heat.

Why the Industry Is Worried

India’s auto component manufacturers, especially those catering to the EV segment, rely heavily on imports for high-performance magnets. With demand for EVs rising and China tightening control, the supply-demand gap is widening.

Tier 2 cities like Pune, Coimbatore, Rajkot, and Aurangabad — home to hundreds of MSME auto part suppliers — are particularly vulnerable. Many small manufacturers may not have the resources to stockpile or diversify sourcing quickly.

This could lead to delays in production, increased costs, and reduced competitiveness in both domestic and global markets.

Calls for a National Strategy

The Automotive Component Manufacturers Association (ACMA) and other industry bodies are urging the central government to:

• Secure long-term trade agreements with rare earth-producing nations
• Encourage domestic mining and processing of rare earth elements
• Invest in R&D for alternate magnet technologies and recycling systems

Some experts also recommend creating a national stockpile of critical materials to reduce import dependency.

Opportunities for India

While the challenge is serious, it also opens up an opportunity for India to rethink its supply chain resilience. States like Andhra Pradesh and Tamil Nadu are believed to have untapped rare earth reserves that, with the right investment, could reduce foreign reliance.

Developing a local ecosystem for rare earth materials could not only support the auto industry but also boost India’s ambitions in electronics, defense, and renewable energy.

Conclusion

The rare earth magnet shortage is a wake-up call for India’s auto sector and policymakers alike. As EV adoption grows and global competition intensifies, a long-term, strategic approach is needed to protect the future of manufacturing — especially in Tier 2 cities that form the backbone of India’s auto supply chain.