logo
Rare earth magnets crisis: Impact of China's export curbs on Indian automobile industry

Rare earth magnets crisis: Impact of China's export curbs on Indian automobile industry

Deccan Herald14-06-2025
Rare earth magnets are integral to Permanent Magnet Synchronous Motors (PMSMs) used in EVs for their high torque, energy efficiency and compact size.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Rare earths not so rare again, India averts crippling crunch: Anatomy of a near-disaster
Rare earths not so rare again, India averts crippling crunch: Anatomy of a near-disaster

Time of India

time14 hours ago

  • Time of India

Rare earths not so rare again, India averts crippling crunch: Anatomy of a near-disaster

Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel In a significant development, China has finally lifted restrictions on the export of rare earth magnets to India. This decision comes as a major relief to various key sectors of Indian economy, including the automobile industry, renewable energy, consumer electronics, defence, aerospace and China reopening the rare earth supply lines, Indian industry narrowly averted a disaster that could have potentially cripped Indian industry. A ToI analysis looks at why China's lifting of these curbs is timely, especially with the upcoming festive season in India navigates its path towards self-reliance in rare earth magnet production, the recent lifting of Chinese export curbs marks a crucial step. It opens the door for industries to thrive while also setting the stage for future initiatives aimed at reducing dependence on foreign sources, ToI's analysis earth magnets are known for their exceptional strength and resistance to demagnetisation. These magnets are made from rare earth elements such as neodymium, praseodymium and dysprosium, which give them their powerful magnetic most prevalent type of rare earth magnet is the neodymium-iron-boron (NdFeB) magnet, widely used in applications where space and weight are plays a pivotal role in the global rare earth magnet market, accounting for approximately 70% of the world's rare earth metals mining and nearly 90% of magnet production. The country dominates the supply chain, overseeing mining, refining, alloy production and magnet control has allowed China to maintain a stronghold in the industry, especially as the demand for rare earth magnets has surged in recent years, ToI's analysis (by Pankaj Doval) automobile sector, which is required to import about 870 tonnes of rare earth magnets in 2025-26, has been particularly affected by China's previous magnets are essential for various components in both internal combustion engine (ICE) vehicles and electric vehicles (EVs), including electric motors, speedometers and ignition stringent import process imposed by China had raised alarms, with many companies warning of potential production halts and delays in product recent relaxation of export controls is expected to provide substantial relief to Indian industries, enabling them to meet rising industry stakeholders are still advocating for the Indian government to facilitate imports from non-China sources, such as Vietnam, Brazil and Russia, until local production capabilities are towards the future, India aims to achieve self-sufficiency in the production of rare earth magnets within the next three to five years. To realise this goal, a comprehensive domestic value chain must be would require financial incentives linked to production, as well as policy support to encourage investments in high-technology public-private partnerships could play a critical role in setting up rare earth processing facilities and magnet production clusters across the country.

US hikes steel, aluminum tariffs on imported appliances, railcars, EV parts
US hikes steel, aluminum tariffs on imported appliances, railcars, EV parts

Time of India

time16 hours ago

  • Time of India

US hikes steel, aluminum tariffs on imported appliances, railcars, EV parts

The US Commerce Department said on Tuesday it is hiking steel and aluminum tariffs on more than 400 products including wind turbines, mobile cranes, appliances, bulldozers and other heavy equipment, along with railcars, motorcycles, marine engines, furniture and hundreds of other products. The department said 407 product categories are being added to the list of "derivative" steel and aluminum products covered by sectoral tariffs, with a 50 per cent tariff on any steel and aluminum content of these products plus the country rate on the non-steel and non-aluminum content. Evercore ISI said in a research note the move covers more than 400 product codes representing over $200 billion in imports last year and estimates it will raise the overall effective tariff rate by around 1 percentage point. The department is also adding imported parts for automotive exhaust systems and electrical steel needed for electric vehicles to the new tariffs as well as components for buses, air conditioners as well as appliances including refrigerators, freezers and dryers. A group of foreign automakers had urged the department not to add the parts, saying the US does not have the domestic capacity to handle current demand. Tesla unsuccessfully asked Commerce to reject a request to add steel products used in electric vehicle motors and wind turbines, saying there was no available US capacity to produce steel for use in the drive unit of EVs. The new tariffs take effect immediately and also cover compressors and pumps and the metal in imported cosmetics and other personal care packaging like aerosol cans. "Today's action expands the reach of the steel and aluminum tariffs and shuts down avenues for circumvention - supporting the continued revitalization of the American steel and aluminum industries," said Under Secretary of Commerce for Industry and Security Jeffrey Kessler. Steelmakers including Cleveland Cliffs, Nucor and others had petitioned the administration to expand the tariffs to include additional steel and aluminum auto parts.

Rare earth magnet ban lifted: What it means for India's EV and auto sector
Rare earth magnet ban lifted: What it means for India's EV and auto sector

Hindustan Times

time17 hours ago

  • Hindustan Times

Rare earth magnet ban lifted: What it means for India's EV and auto sector

After months of shadowboxing over trade and supply chains, Beijing has finally eased its grip, lifting the export ban on rare earth magnets to India. For the auto industry, the move comes not a moment too soon. This ends a standoff for the Indian auto industry that could have disrupted production lines and hampered the country's EV ambitions. Back in April, Beijing tightened the screws on exports of seven key rare earth elements and magnets, citing end-use checks and stricter licensing rules. For India, which depends on China for over 80 per cent of its magnet imports, the curbs landed like a punch to the gut. The decision follows a round of high-level diplomacy between External Affairs Minister S. Jaishankar and his Chinese counterpart Wang Yi, signalling a fragile but meaningful easing in bilateral trade friction. Also Read : India's Bajaj Auto flags lower-than-planned EV output on rare earth magnet crunch The ban that stalled the wheels Back in April, Beijing tightened the screws on exports of seven key rare earth elements and magnets, citing end-use checks and stricter licensing rules. For India, which depends on China for over 80 per cent of its magnet imports, the curbs landed like a punch to the gut. Factories began to stutter. Maruti's much-hyped e Vitara EV lost two-thirds of its near-term output forecast, dropping to just 8,200 units between April and September, down from 26,500. Bajaj Auto, too, warned of a possible 'zero month" for electric scooter and three-wheeler output in August due to shortages. Crisil flagged how a 30 day delay in magnet supply, even though these parts account for less than 5 per cent of vehicle cost, could derail production of EVs and internal-combustion vehicles alike. Also Read : India's Bajaj Auto flags lower-than-planned EV output on rare earth magnet crunch A vulnerability exposed The Indian auto industry felt like a sprinter tangled in the blink of a false start. The EV race isn't just about sleek designs, it's about reliable supply chains. With India importing over 80 per cent of its 540 tonnes of rare earth magnets from China, that choke point exposed a vulnerability in the entire value chain. Delegations in the industry were forced to push for emergency meetings with Chinese officials. Visas were approved for many executives, yet licenses to import were slow in coming. The vacuum forced the Indian government into fast-tracking discussions on subsidies to scale up domestic magnet manufacturing. What the ban's removal unlocks Now, with China easing export flows, the clock resets, and India's auto industry can restart its engines. EV production lines can roar back to life. Maruti Suzuki, for one, can push up e Vitara volumes in the second half of fiscal 2025–'26 and still meet its yearly goal of 67,000 EVs. Bajaj would have a fighting chance to salvage August production. Also Read : Maruti Suzuki e-Vitara's production to start on 26 August More than just immediate reprieve, this development becomes a bridge to a more resilient future. It gives breathing space to ongoing efforts, like IREL's pursuits with Japan and Korea to kickstart domestic rare earth magnet production, and India's national push to build processing infrastructure. The road ahead The Indian auto industry has learned its lesson hard. Gone are the days when a strategic choke point could bring production to a standstill. While the lifting of the ban is satisfying, it is not enough. Building internal capacity, diversifying supply chains, and strengthening domestic manufacturing now seem inevitable in the EV era. For India's automobile sector, the lifting of the ban is both a relief and a reminder. Relief, because supply lines can start moving again. Reminder, because overdependence on a single source is a strategic vulnerability no industry can afford. In that sense, the rare earth episode may just have handed India's EV transition its most important lesson yet: resilience matters as much as scale. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date:

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store