The Automotive Component Manufacturers Association of India (ACMA) believes the ongoing rare earth magnet supply crisis is a wake-up call for the industry.
08 Jul 2025 | 715 Views | By Kiran Murali
Automotive Component Manufacturers Association (ACMA) believes the ongoing rare earth magnet supply crisis from China is a wake-up call for the industry and highlights the need for a national strategy on critical materials to safeguard the future of EV and mobility manufacturing in the country.
Rare-earth magnets ...
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Automotive Component Manufacturers Association (ACMA) believes the ongoing rare earth magnet supply crisis from China is a wake-up call for the industry and highlights the need for a national strategy on critical materials to safeguard the future of EV and mobility manufacturing in the country.
Rare-earth magnets play a critical role in the modern automotive industry, especially as the sector accelerates towards electrification, automation, and efficiency. These magnets are important for current and next-gen vehicles, particularly EVs, because of their high performance in small form factors, enhanced energy efficiency and critical functionality in both powertrains and digital systems.
“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,” Automotive Component Manufacturers Association of India (ACMA) President and Subros CMD Shradha Suri Marwah said.
In April, China implemented stricter rules on exporting rare-earth elements and related magnets, requiring import permits. These changes were initially seen as a response to tariffs imposed by the U.S., but the impact is now rippling across India’s automotive supply chains.
While China appears to be easing magnet supplies to Western nations, there has been no indication of similar relief for India. OEMs like Bajaj Auto and TVS Motors have already voiced their concerns publicly and warned of potential disruption in production.
When asked about any potential production cut, Marwah said: “Nobody has formally told us [about production cut]. But yes, we do understand that since April, there has been no import of rare-earth magnets, and the situation can last as long as they have the inventories. And again, the inventories are not infinite.”
Companies and the government are urgently working to secure alternative supply chains before their production lines are forced to a standstill.
While a delegation of auto industry leaders awaits appointments from the Chinese government to visit Beijing to find a solution for the current magnet supply crunch, the Indian government is looking to boost domestic rare earth mineral production to reduce dependence on China in the long term.
China has decades of investment in rare earth R&D, spanning extraction, separation, metal-making, and magnet manufacturing, while India is still in its early stages. India’s annual rare earth production was limited to around 2,900 metric tons in 2022 and 2023, despite a reserve of over 7 million tons.
The government recently launched the National Critical Mineral Mission for self-reliance in the critical mineral sector. As part of this initiative, the Geological Survey of India is tasked with executing 1200 exploration projects, including rare earth minerals, between FY25 and FY31. Over 100 critical mineral blocks are slated for auction, and exploration will expand into offshore regions. These areas are rich in polymetallic nodules containing cobalt, rare earth elements, nickel, and manganese.
“The only solution for this is for us [in the long term] to be Atmanirbhar. That is where we have to focus all our energies. This is a wake-up call. There are no options left. We have to move towards almost 100% localization,” ACMA Director General Vinnie Mehta said.
“Our industry is very agile. We immediately start working on alternate solutions, which we already are. We are very clear that in the long run, we will have a permanent solution to this. India has the raw material. We just need the processing technology. There is a lot of work that is happening. We are hopeful that it won't be as bad as it seems,” Marwah said.
Several auto component makers are also actively developing and researching alternatives to replace rare-earth magnets. Companies like Mahle, Valeo, Sterling Gtake, Sona Comstar, Greaves Cotton, Chara Technologies and Attron Automotive are all working on an alternative to rare-earth magnet motors or other systems.
While magnet-free motors or rare-earth-free magnets offer a path to reducing dependence on critical materials, many industry experts say these technologies come with their own set of challenges for mainstream adoption, especially in high-performance applications like electric vehicles.
Issues like lower power density, lower efficiency, and increased size and weight of motors are the major concerns, and those alternative technologies are yet to see any large-scale commercial usage.