ACMA Report Highlights November China Rare-Earth Risk

China's October 2025 export curbs on rare earths remain suspended rather than withdrawn, with the suspension running only until 10 November 2026, according to the BCG-ACMA report Beyond Resilience, released in September 2026.

The report, which cites data as at August 2026, lists the point in the source note to its exhibit on structural raw material shocks. It places the expiry alongside a set of dependencies that have not materially changed since the 2025 disruption.

India sources about 85% of its rare-earth magnets from China, which controls roughly 90% of global processing capacity. When Beijing placed the magnets under export licences in 2025, its own exports fell about 74% year on year in May 2025, and Indian manufacturers were left holding a few weeks of stock.

The consequences reached the production line. Passenger vehicle and two-wheeler makers cut and deferred EV output, and the report records that one leading OEM scaled back its new EV model output plans by about two-thirds during 2025. Supply to India eased only by September 2025.

Rare earths are one of four exposures the report groups together as structural rather than cyclical. China placed graphite, gallium and germanium under export licensing in 2023 and antimony in 2024. Battery-grade graphite processing is almost entirely concentrated in China, and India imports nearly all its lithium-ion cells, leaving the EV battery chain heavily China-dependent even as the domestic cell push proceeds. Gallium traded at roughly 2.5 times pre-control prices in 2025. All three of gallium, germanium and antimony appear on India's 2023 list of 30 critical minerals, and the report notes that a large Indian battery maker reported a fall in expected income on the back of higher antimony prices.

The report's framing is that these are risks of access rather than of price, and that building India's own capacity will take time.

Policy has moved in that direction. The Rare-earth Permanent Magnet Scheme, approved in November 2025 with an outlay of about ₹7,300 crore, is intended to produce magnets used in EV motors, power steering and sensors domestically, targeting roughly 6,000 tonnes a year and reducing dependence on China.

Company-level responses in the report suggest the faster lever is engineering rather than sourcing. One large driveline manufacturer, having invested heavily in in-house engineering capability, moved from heavy rare-earth magnets to light rare-earth and rare-earth-free motors within two months during the crisis, substantially limiting its revenue loss while others were still scrambling. Suppliers without design ownership had no equivalent option – build-to-print manufacturers depend on the OEM's engineering team to authorise any material change.

More broadly, the report finds that two-thirds of small companies have not qualified a second source for most critical inputs, against about one-third of large companies, and that nearly two in three companies lack a systematic sub-tier risk assessment with a consolidated view and a regular review cadence.