Magnets in limbo: No rare earth nod yet from China for Indian auto suppliers
No Indian auto component or vehicle manufacturer has received approval from the Chinese government to procure rare earth magnets so far, Times of India reported citing sources. Despite efforts by Indian officials to intervene, the sources said there is "no clarity as yet" on when a meeting with Chinese representatives might happen.
The applications for sourcing magnets were submitted primarily by auto component makers who manufacture complete, high-tech assemblies. These include speedometers, electric motors, e-axles, electric water pumps, automatic transmission kits, speakers, sensors, and ignition coils used in engines. Among the companies that have applied are Uno Minda, Bosch, Mareli, TVS Group, Motherson Sumi, and Sona Comstar.
Economic Times reported this week that the number of India-based firms awaiting approval from China's ministry of commerce to import rare earth magnets has nearly doubled—from 11 two weeks ago to 21 now. This list includes Bosch India, Marelli Powertrain India, Mahle Electric Drives India, TVS Motor, and Uno Minda. Sona Comstar, whose earlier application was rejected due to procedural issues, has reapplied and is now among the 21 companies awaiting clearance, a senior industry executive told ET.'There were no approvals so far, according to the latest assessment we carried through interactions with industry representatives,' one source told TOI. 'The situation is grave, and there is now massive uncertainty regarding manufacturing schedules and factory output.'
The request for a meeting with Chinese representatives is being followed up not only by leading industry bodies such as the Auto Component Manufacturers Association (Acma) and Society of Indian Automobile Manufacturers (Siam), but also by government ministries including heavy industries, external affairs, and commerce.
Senior officials from major automobile companies such as Maruti Suzuki, Mahindra & Mahindra, Tata Motors, Bajaj Auto, and TVS are also involved in pursuing the matter with the government and diplomatic channels.Earlier this week, the auto industry held a meeting with top officials at the Ministry of Heavy Industries as the government examined possible solutions to the crisis. 'However, not much headway was made so far,' an official source told the newspaper.Industry executives said that Ernst & Young has been brought on board by the ministry to assist with the issue. During the meeting, officials also reviewed the current preparedness of some Indian companies that are working in the field of magnet production.Automakers urged local magnet producers to provide a firm supply timeline, if at all possible, stating that uninterrupted production lines depend on timely procurement of components. According to the report, both Acma and Siam have drawn up a list of delegates they hope to send to China if the Indian government is able to facilitate such a visit.China's restrictions were formally issued through a notification on April 4 this year. The new rules apply to medium and heavy rare earth metals, their alloys, magnets, and related products under the country's export permit system.To prevent diversion of these materials to defence and weapons production, China now requires exporters to secure a licence. This licence depends on an End User Certificate (EUC), which must be approved first by India's Directorate General of Foreign Trade (DGFT) and the Ministry of External Affairs, and then also endorsed by the Chinese Embassy in India.Only after these steps are completed can the EUC be sent to China for the final stages of approval—first by the provincial government where the exporting company is located, and then by China's Ministry of Commerce.
Rare earth magnets are critical components used in permanent magnet synchronous motors (PMSMs), which are widely applied in electric vehicles because of their compact size, high torque, and energy efficiency. Hybrid vehicles also rely on these magnets for efficient propulsion systems. While parts manufacturers based in Europe have recently received approval from Chinese authorities to source rare earth magnets, their Indian counterparts—despite being part of the same multinational corporations—are still waiting for the go-ahead from Beijing. According to experts, this delay is worsened by the strained political and commercial relationship between India and China.Indian companies have been attempting to build local capabilities to reduce reliance on imported rare earth materials, but experts say this effort remains extremely challenging and is unlikely to provide immediate relief.
(with ToI inputs)
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