A mounting provide chain concern involving uncommon earth magnets is elevating alarm throughout India’s car sector. With new Chinese language export guidelines delaying shipments, producers are warning of great disruptions to car manufacturing if provides aren’t restored quickly.
On the middle of the issue is an important part: neodymium-iron-boron (NdFeB) magnets. These uncommon earth magnets are indispensable to each electrical and traditional autos, utilized in methods starting from motors and steering to brakes, wipers, and audio tools.
With out them, even a small scarcity can carry meeting traces to a crawl.
What modified?
The bottleneck started in April, when China — which processes greater than 90% of the world’s uncommon earth magnets — launched stricter export controls. Beneath the brand new guidelines, exporters should get hold of authorities licenses and detailed end-use certificates from consumers earlier than delivery. Whereas pitched as procedural updates, the outcome has been a slowdown in clearances. In keeping with The Financial Occasions, a number of Indian-bound consignments are caught at Chinese language ports with no motion in sight.
Not like some European firms, Indian companies haven’t but acquired export approvals, deepening issues about when manufacturing might begin to really feel the pressure. Present stock ranges, trade executives say, may run out by early June.
What’s being achieved?
In response, a delegation from the Society of Indian Vehicle Producers (SIAM) and the Automotive Element Producers Affiliation (ACMA) is reportedly getting ready to journey to China. Their goal is to satisfy with Chinese language authorities and search expedited approvals. India’s commerce and exterior affairs ministries, the ET report claimed, are actively supporting the outreach by means of diplomatic channels.
Why these magnets?
India imported 460 tons of uncommon earth magnets in FY24 — nearly all from China — and deliberate to import 700 tons this 12 months. Their comparatively low worth belies their important operate. No viable alternate options exist at scale as we speak, which leaves Indian manufacturing traces uncovered.
To scale back long-term dependency, India is advancing plans for home manufacturing. A high-level assembly is reportedly scheduled for June 3, the place the Ministry of Heavy Industries will finalize a assist framework for magnet manufacturing, together with incentives and infrastructure.
