The move has unsettled India’s auto industry, which already depends heavily on Chinese imports for EV batteries and parts. India isn’t alone in this struggle. The US and EU also rely on China, which controls nearly the entire supply chain of these materials. Currently, China supplies 85-95% of the world’s rare earth metals, cementing its grip on advanced industries.
Marwah said that there are long-term solutions, but in the immediate there are some challenges which the industry is ‘trying to work around’. “There are some issues that we are facing right now with China holding back on them (rare earth magnet licenses). 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,” she added.
Realising the importance of localisation, India’s government recently launched the National Critical Mineral Mission for self-reliance in the critical mineral sector. Several auto component makers are working alternatives to replace rare-earth magnets.
Meanwhile, ACMA said on Tuesday that the domestic auto component industry grew 9.8% year-on-year in FY25 to Rs 6.73 lakh crore. Between FY20 and FY25, the sector grew at a CAGR of 14%.
