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China controls 90 per cent of the global processing capacity for magnets used across sectors
The limited availability of rare earth magnets remains a concern for the auto industry, underscoring the need for a national strategy on critical minerals to secure the future of electric vehicle (EV) and mobility manufacturing in India, the Automotive Component Manufacturers Association of India (ACMA) said on Tuesday.
The auto industry has started to work on alternative solutions, though it would take some years, Shradha Suri Marwah, President, ACMA, told reporters here.
Since April, China – that controls 90 per cent of the global processing capacity for magnets used across sectors, including automobiles, home appliances and clean energy – has mandated special export licences for seven rare earth elements and related magnets.
“There are some issues that we are facing right now with China holding back on them (rare earth magnet licenses). People have stocks of the commodity; it’s a low-cost item, but an important item. So, till stocks are there, things are looking good,” Marwah said.
Trump tariff list
Meanwhile, when asked about the Indian auto component makers’ expectations from the trade deal with the US, Vinnie Mehta, Director General, ACMA, said India was not included in the list of countries that received tariff letters from the Trump administration on Monday, but there could be be a second phase in the imposition of reciprocal tariffs.
“Our (India) name is not in the list of the 14 countries, and we are hopeful that they would be able to sort of come out with a deal…I do not have any insights into what would be the contours of the deal. It may be a truncated one, but then there would be a second phase also. That’s what I understand,” he said.
Mehta also said that the government has been regularly consulting with the auto parts industry on the proposed deal, while adding that “the people on the other side are not so easy”.
The Trump administration has now suspended reciprocal tariffs until August 1, from the earlier deadline of July 9. The US is the single-largest market for Indian automotive manufacturers.
ACMA also shared that despite various geopolitical issues and supply chain challenges, the auto components industry reported a turnover of $80.2 billion (₹6.73 lakh crore) for FY2025 – a growth of around 10 per cent as compared with FY2024.
The industry grew at a CAGR of 14 per cent from FY20 to FY25, nearly doubling in size over a period of past five years, ACMA said in its industry performance review for FY25.
Published on July 8, 2025
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