Archive · 21 Jun 2025
India's Auto Sector Faces Supply Challenges Due to Rare Earth Magnets
Rare earth magnets are important parts of many things we use every day, like electric cars.
These magnets are made from special materials, and China controls most of the world's supply.
Because China has made it harder to get these magnets, it's causing problems for car companies, especially in India.
Since Indian carmakers depend on China for magnets, they are worried about getting enough and how much they will cost.
This makes it tricky for India as they try to make more electric cars.
Rare earth magnets are essential components in various devices, including electric vehicles and consumer electronics.
China dominates the global supply chain of rare earth elements, with over 90% control.
China tightened export controls on rare earth magnet technologies in April 2025, disrupting the supply chain.
Indian automakers heavily rely on Chinese suppliers for these magnets, creating a strategic vulnerability.
India imported over 80% of its 540-ton magnet imports from China in the previous fiscal year, witnessing a supply crisis.
- Who
- Indian automakers and Chinese suppliers.
- What
- Rare earth magnets, essential for various industries like the automotive sector, are facing supply challenges.
- When
- China tightened export controls in April 2025.
- Where
- China and India.
- Why
- To ensure access to key components and manage costs, especially with the rising demand for electric vehicles.
China
India
Export Controls
China
Imposing export controls to ensure national security.
India
Supply disruptions for India's auto sector, increasing costs
- Primary Use
- Electric motors (EVs and hybrids), electronics
- Dominant Supplier
- China (over 90% of the global supply)
- China's Action
- Tightened export controls on rare earth magnet technologies
- India's Import Dependency
- Over 80% of its magnet imports from China
- Import Volume (Previous Fiscal Year)
- 540 tons
