Need national strategy on critical materials, says ACMA
Automotive Component Manufacturers Association (ACMA) is advocating for a national strategy on critical materials to safeguard the future of EV and mobility production in the country. This call comes as the auto industry is possibly looking at production cuts when the existing inventory dries out, as there has been no import of rare earth magnets in India since April this year.
“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,” said ACMA President Shradha Suri Marwah on Tuesday.
She termed the rare earth magnet shortage a major concern and said that the industry is agile and has started to work on alternative solutions. She stated that the industry will have to become self-reliant in order to avoid the current situation where the sector is staring at a potential crisis with China putting a lid on the export of rare earth magnets.
Leveraging its mineral dominance for geopolitical influence, China has restricted exports of vital rare earths, including EV magnet components. These elements are essential for power steering, electric windows, and high-efficiency motors, making them indispensable for automakers.
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%.