China blocks magnets for India alone, say auto firms

India's auto industry has flagged to the Centre that local companies' applications for rare earth magnets are pending in China, even as applications from other countries are being approved, three industry executives aware of the matter said on condition of anonymity.

- Ayaan Kartik & Nehal Chaliawala

As a result, India's production of conventional and electric vehicles (EVs) could be hit as early as this month if China doesn't resume exports of its rare earth magnets to the country soon, auto industry representatives told the secretary of the heavy industries ministry on 29 May.

China has a near-monopoly on rare earth magnets, which are essential for manufacturing EV motors and other auto components.

Representatives from several automotive companies and two industry bodies told the secretary that foreign units of multinational auto component companies were receiving approvals for rare earth magnet shipments from China, but their Indian subsidiaries were still awaiting approvals, according to the executives cited above.

While the industry body did not name any companies at the meeting, Mint has learned that Germany-headquartered Bosch, Continental Automotive, and Mahle Group have received approvals for their foreign units but their applications from India are yet to be accepted.