National plan for key materials needed to secure EV future: Auto parts makers

Economic Times

6 days ago

Indian auto parts manufacturers are urging the government to develop a national strategy for critical materials, particularly rare earth magnets, essential for electric vehicle production. This call to action comes in response to China's export restrictions, which have disrupted global supply chains.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
New Delhi: Auto parts makers are urging the Centre for a national strategy on critical materials to secure the future of automobile manufacturing in the country including electric vehicles . This follows China restricting exports of rare earths, disrupting global supply chains at industries reliant on rare earth magnets like automobiles.Shradha Suri Marwah, president, Automotive Component Manufacturers Association of India (ACMA) said while auto parts makers are continuing to invest in value addition, technology upgradation, and localisation to align with evolving customer needs and global supply chain dynamics, the shortage of rare earth magnets is proving to be a challenge."The limited availability of rare earth magnets is a concern, underscoring the need for national strategy on critical materials to secure EV's future and mobility manufacturing in India," said Marwah, also MD of auto parts maker Subros She said India has adequate raw materials for making rare earth magnets and can attain self-sufficiency if processing centres are set up. "The industry is agile and has also started working on alternate solutions," she added.Despite geopolitical and supply chain challenges globally, Marwah said the Indian auto parts industry clocked a 10% increase in revenues at $80.2 billion in FY25. The industry, in fact, grew at 14% compounded annually between FY20 and FY25, nearly doubling in size in five years. "FY25 was yet another milestone year where the industry's growth was underpinned by strong domestic demand, rising exports and increasing value addition," said Marwah, adding that as India transitions towards new-age mobility, the industry is making the necessary strides in investments, technology and localisation to serve both domestic and global markets effectively.While exports rose by 8% to $22.9 billion last fiscal, imports went up at a slower 7.3% to $22.4 billion, resulting in a trade surplus of $453 million. The trade surplus improved from $300 million in FY24.Vinnie Mehta, director general, ACMA said, "This increase in trade surplus indicates India's growing manufacturing competitiveness in the global market and localisation initiatives."