India’s auto component industry is calling for a national strategy to secure access to critical materials essential for electric vehicle (EV) manufacturing, amid a potential production crunch due to a shortage of rare earth magnets .
The Automotive Component Manufacturers Association of India (ACMA) on Tuesday raised alarm over dwindling supplies after China, which processes over 90% of the world’s magnets, imposed export restrictions in April. These magnets are key components not just in EVs, but also in sectors like clean energy, home appliances, and traditional vehicles.
Shradha Suri Marwah, president of ACMA, described the situation as a “major concern”, warning that the country’s EV plans could be severely disrupted.
“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,” she said, quoted by PTI.
The ACMA president further added that the sector is agile and has started to work on alternative solutions.
Marwah noted that the industry must become self-reliant to avoid situations like the current one, where a potential crisis looms due to China restricting the export of rare earth magnets.
She said that though there are long-term solutions, at present, there are many challenges which the industry is ‘trying to work around.’
The domestic auto industry has been compelled to act after the Chinese government imposed export restrictions on rare earth elements and related magnets starting April 4 this year.
China’s curbs require special licences to export seven types of rare earth materials and related magnets. Since April, India has not received any fresh imports, leaving the domestic industry dependent on existing inventories.
“There are some issues that we are facing right now with China holding back on them (rare earth magnet licenses),” Marwah said. “ People have stocks of the commodity; it's a low-cost item, but an important item. So till stocks are there, things are looking good.”
“We are very clear that in the long run, we will have a solution to this, because India has the raw material. We just need to process technology, we'll be able to do it. So, there's a lot of work that's happening and we're hopeful that, you know, it won't be as bad as it seems right now,” she stated.
ACMA director general Vinnie Mehta also expressed concern, over the curb, saying that there have been no imports of rare earth magnets since April, and the current situation can last only until companies exhaust their existing inventories.
"And again, the inventories are not infinite," PTI cited the
He said that the industry is working to develop alternatives and that being self-dependent is the only option left, requiring it to move to a higher fraction of localisation.
"So that is where we have to focus all our energies on. And honestly, this is a wake-up call. If we do not do it, we're going to die," he warned.
Marwah said efforts are underway to localise production and reduce dependency. “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,” she said.
"We don't want to be stuck. We don't want to be stuck in situations like this as a country and as an industry."
She also pointed to broader geopolitical disruptions, which have made global supply chains more volatile. “We have disruptions that are happening in freight and logistics because various corridors are closed. This leads to longer lead times, larger inventory to be held, which also means working capital is becoming tighter,” she said.
Despite these challenges, she said, the auto components industry expects FY26 to be a steady year.
"We think the future will hold good, despite and in spite of everything, because we do believe that India is still in a sweet spot," she said.
Recorded a strong performance in FY25, with turnover rising almost 10% year-on-year to $80.2 billion (Rs 6.73 lakh crore). The sector also nearly doubled in size over the past five years, growing at a CAGR of 14% from FY20 to FY25.
“FY25 was another milestone year. Growth was driven by robust domestic demand, rising exports, and greater value addition,” Marwah said.
India’s trade surplus in the sector also widened to $453 million in FY25 from $300 million the previous year, reflecting growing global competitiveness and localisation.
He added that the aftermarket, valued at Rs 99,948 crore, recorded a 6% growth, while component supplies to domestic OEMs rose by 10% to Rs 5.7 lakh crore.
Auto component exports rose by 8% to $ 22.9 billion (Rs 1,92,346 crore) in FY 2023-24, up from $21.2 billion (Rs 1,75,960 crore) the previous year. Imports grew by 7.3% to $22.4 billion, with Asia, primarily China, contributing nearly two-thirds of the total.
The Automotive Component Manufacturers Association of India (ACMA) on Tuesday raised alarm over dwindling supplies after China, which processes over 90% of the world’s magnets, imposed export restrictions in April. These magnets are key components not just in EVs, but also in sectors like clean energy, home appliances, and traditional vehicles.
Shradha Suri Marwah, president of ACMA, described the situation as a “major concern”, warning that the country’s EV plans could be severely disrupted.
“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,” she said, quoted by PTI.
The ACMA president further added that the sector is agile and has started to work on alternative solutions.
Marwah noted that the industry must become self-reliant to avoid situations like the current one, where a potential crisis looms due to China restricting the export of rare earth magnets.
She said that though there are long-term solutions, at present, there are many challenges which the industry is ‘trying to work around.’
The domestic auto industry has been compelled to act after the Chinese government imposed export restrictions on rare earth elements and related magnets starting April 4 this year.
China’s curbs require special licences to export seven types of rare earth materials and related magnets. Since April, India has not received any fresh imports, leaving the domestic industry dependent on existing inventories.
“There are some issues that we are facing right now with China holding back on them (rare earth magnet licenses),” Marwah said. “ People have stocks of the commodity; it's a low-cost item, but an important item. So till stocks are there, things are looking good.”
“We are very clear that in the long run, we will have a solution to this, because India has the raw material. We just need to process technology, we'll be able to do it. So, there's a lot of work that's happening and we're hopeful that, you know, it won't be as bad as it seems right now,” she stated.
ACMA director general Vinnie Mehta also expressed concern, over the curb, saying that there have been no imports of rare earth magnets since April, and the current situation can last only until companies exhaust their existing inventories.
"And again, the inventories are not infinite," PTI cited the
He said that the industry is working to develop alternatives and that being self-dependent is the only option left, requiring it to move to a higher fraction of localisation.
"So that is where we have to focus all our energies on. And honestly, this is a wake-up call. If we do not do it, we're going to die," he warned.
Marwah said efforts are underway to localise production and reduce dependency. “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,” she said.
"We don't want to be stuck. We don't want to be stuck in situations like this as a country and as an industry."
She also pointed to broader geopolitical disruptions, which have made global supply chains more volatile. “We have disruptions that are happening in freight and logistics because various corridors are closed. This leads to longer lead times, larger inventory to be held, which also means working capital is becoming tighter,” she said.
Despite these challenges, she said, the auto components industry expects FY26 to be a steady year.
"We think the future will hold good, despite and in spite of everything, because we do believe that India is still in a sweet spot," she said.
Recorded a strong performance in FY25, with turnover rising almost 10% year-on-year to $80.2 billion (Rs 6.73 lakh crore). The sector also nearly doubled in size over the past five years, growing at a CAGR of 14% from FY20 to FY25.
“FY25 was another milestone year. Growth was driven by robust domestic demand, rising exports, and greater value addition,” Marwah said.
India’s trade surplus in the sector also widened to $453 million in FY25 from $300 million the previous year, reflecting growing global competitiveness and localisation.
He added that the aftermarket, valued at Rs 99,948 crore, recorded a 6% growth, while component supplies to domestic OEMs rose by 10% to Rs 5.7 lakh crore.
Auto component exports rose by 8% to $ 22.9 billion (Rs 1,92,346 crore) in FY 2023-24, up from $21.2 billion (Rs 1,75,960 crore) the previous year. Imports grew by 7.3% to $22.4 billion, with Asia, primarily China, contributing nearly two-thirds of the total.
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