Rare earths are in short supply, and the Indian automotive industry urges the government to contact China

To obtain rare earth supply permits, the Indian automotive industry urges the government to engage with China through diplomatic channels to expedite the approval process.

The Times of India reported on the 8th, citing the Press Trust of India, that industry insiders revealed several Indian suppliers have applied for rare earth exports to Chinese authorities through their partners in China, but have yet to receive any permits. The First Post website stated that on the 7th, China expressed its willingness to expedite the approval of rare earth exports to EU companies, but has not yet responded to applications from Indian companies.

In April this year, China implemented export controls on seven rare earth elements and related magnets, requiring exporting companies to apply for permits from the Ministry of Commerce of the State Council according to relevant regulations. The Coinage News reported that this has a significant impact on Indian industry, especially the Indian automotive sector. The report mentioned that although India has one of the world's top five rare earth reserves (approximately 6.9 million tons), the extraction volume is very small, leading to a heavy reliance on imports, particularly from China.

Indian media reported that India has taken some measures to change the current supply situation. In January, the Indian government approved an investment of 163 billion rupees (approximately 13.68 billion yuan) to develop the critical minerals sector, and in March, opened rare earth exploration permits to the private sector. Reuters reported this month, citing informed sources, that India is negotiating with companies to establish long-term inventories of rare earth magnets by providing financial incentives. However, the Coinage News mentioned that these measures are far from sufficient, as a report from the Export-Import Bank of India pointed out that India's refining and processing capacity is limited, restricting the extraction of domestic reserves.

According to reports from the Indian "Republicworld" website and the Financial Express, due to the shortage of rare earth magnets, Indian automakers may halt electric vehicle production or face delays in new electric vehicle deliveries. Rakesh Sharma, Executive Director of Bajaj Auto, admitted that supplies and inventories are gradually depleting, and if the situation does not improve, production in July will be severely affected. India's largest automaker, Maruti Suzuki, stated that car production has not been immediately affected, but one model is facing production interruption due to supply chain challenges. Gaurav Vangal, Associate Director of S&P Global Mobility's India Light Vehicle Production Forecast, stated that the current situation remains stable, with some electric vehicle supplies affected, but still within a controllable range.

The Times of India cited an analysis by Rajat Mahajan, who is responsible for the automotive industry at Deloitte India, stating that several magnets regulated by China have high magnetic energy storage capabilities and low coercivity at high temperatures. "So far, other magnetic materials have not achieved large-scale commercial application in electric vehicle production and other fields." Mahajan noted that the available recyclable rare earth magnets cannot meet the current production needs of electric vehicles, and automakers find it difficult to quickly switch to different power systems or alternative materials.

In response, Mahajan stated, "I hope this situation can be resolved through diplomatic channels." The Times of India mentioned that earlier last week, Rahul Bharti, a senior executive at Maruti Suzuki, revealed that the Indian industry is in discussions with the government. Additionally, the Financial Express reported that the Indian Automobile Manufacturers Association has also contacted the government, hoping it will intervene through diplomatic means to seek supply permits for rare earth magnets Indian media reports that India has begun discussions with Vietnam, Indonesia, Japan, the United States, and Russia regarding the supply of rare earth magnets. The Times of India cites expert analysis stating that although automakers are exploring ways to reduce dependence on Chinese supplies, it remains difficult to find direct alternatives.

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