Race For Rare Earths

INDIA MUST RAMP UP ITS MINING AND REFINING OF RARE EARTH ELEMENTS. OTHERWISE BECOMING A TECH SUPERPOWER AND A SELF-RELIANT MILITARY FORCE MAY JUST BE WISHFUL THINKING

- Pushpita Dey)

India’s largest carmaker, Maruti, had only just begun to test the waters of electric mobility when it quietly scaled back its electric vehicle (EV) manufacturing targets for the year. The decision made internally and with little fanfare, was less about market appetite and more about material reality. At the heart of the issue lay India’s precarious position in the rare earth magnet supply chain—an Achilles heel for any serious EV or high-tech ambition.

The country remains almost entirely dependent on China for these crucial components, and when Beijing, in a strategic gesture aimed at the United States and its economic partners, tightened its grip on rare earth exports, the message was unmistakable. Supply, as it turns out, can be a geopolitical weapon too.

Maruti is not alone. For much of the past month, India’s automobile industry has been on tenterhooks, grappling with the looming threat of production halts—not due to labour unrest or flagging demand, but because of a shortage of rare earth magnets, the unsung enablers of electric mobility. Without them, EVs cannot function the way they are meant to function. And without EVs, the industry's future feels less certain.

The stakes are high. The automotive sector, which contributes 7.1% to India’s GDP and almost half to its manufacturing GDP, has long been a cornerstone of India's industrial success. It is arguably one of the country's most tangible Make in India stories, long before the phrase became a political slogan. That slogan now forms the backbone of Prime Minister Narendra Modi's vision of self-reliance in an age tilting away from globalisation.

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