Component industry facing Rare Earth magnet crisis, ACMA demands national strategy
Rare Earth Magnets: The auto component industry, facing a shortage of rare earth magnets, has demanded that the government formulate a national strategy to deal with this crisis. ACMA has described self-reliance and alternative solutions as the need of the hour.
As a result of China's export ban on rare earth magnets, its crisis in India is growing. The auto component sector is under the threat of halting production due to a lack of rare earth magnets. Terming this crisis as severe, President, Automotive Component Manufacturers Association (ACMA), Shraddha Suri Marwah said the time had now come for India to be self-reliant in this area. He has called on the federal government to develop a national policy about critical materials.
China made the special license for export of rare earth minerals and magnets compulsory from 4 April 2025. China possesses over 90% of the world's magnet processing capacity. India has not seen a single import of rare earth magnets since April.
ACMA Director General Vinnie Mehta said that companies have limited stock left, and this cannot be a permanent solution.
Shraddha Suri said that the industry has started working towards a solution. India has reserves of these magnets, but processing technology is needed. Both the government and the industry are unanimous in this direction.
She says, "This crisis is a wake-up call for us. If we do not wake up now, there will be big problems in the future."
Marwah said that due to geopolitical crises, there are also obstacles in the logistics and freight sector. The closure of many corridors is increasing inventory and pressure on working capital.
Despite the crisis, the turnover of the auto component industry in FY25 stood at Rs 6.73 lakh crore (USD 80.2 billion), which is 10% more than FY24. The industry has grown at a CAGR of 14% between FY20 and FY25.
ACMA believes that India will now have to move towards high localization and its own processing technology. This is not just an industry crisis but a national challenge, which can be solved only through long-term policy and technological investment.
