How India’s auto firms survived a rare earth scare

The Chinese rare earths crisis worked as a wake-up call for lautomakers and policymakers in India.

- Ayaan Kartik & Manas Pimpalkhare

From the boardrooms of Mumbai to the policy corridors of Delhi, executives began huddling early this year over a little-known but indispensable component that goes into virtually every vehicle on the road: rare-earth magnets.

When China imposed a ban on exporting them in April, automakers assumed the move was temporary. However, China's refusal to relax export licensing sent a shiver through the sector. Fresh concerns emerged after Beijing restricted exports of chips sold to automakers by Nexperia in Europe. The crisis once again hit home after major European auto-component suppliers such as Bosch flagged a potential impact on operations.

The crisis worked as a wake-up call for automakers and policymakers.

“The auto sector manufacturing hubs of Tamil Nadu, Delhi-NCR, and around Pune have grown rapidly over the years. But based on 2025, the one question on everyone's mind will bewhat will China dominate next?” said Abhay Tilak, director of the Indian School of Political Economy, Pune.

Asked how the company ensured that production did not suffer, Rajesh Jejurikar, executive director and chief executive officer (CEO) of the auto and farm division at Mahindra and Mahindra (M&M), last month said that the information is a competitive advantage.