Kathmandu. The future of India’s automobile industry is in jeopardy. China has stopped the export of rare things (India’s imports from the US) to India. This is more important for electric vehicles and traditional vehicles.
Simply put, no vehicle can be made without this thing. This thing is used in systems ranging from motor and steering to brakes, wipers and audio equipment. Without this, the production of vehicles can stop.
Companies are frustrated by the delay in shipments caused by China’s changes to export regulations and are warning that if supplies are not restored soon, production of riderships could be disrupted.
That rare thing is the neodymium-iron-boron-NDFEB) magnet. It is a rare magnetic metal. Most of these products are exported to China and around the world.
China’s actions create a crisis
China produces more than 90 percent of the world’s rare earth magnetic metals. In April, China imposed strict export control rules. Under the new rules, exporters will have to obtain government licenses and detailed final use certificates from buyers before shipping. However, even after the procedures were completed, the exporter had to wait a long time for approval.
According to The Economic Times, many consignments going to India are stuck at Chinese ports and there is no movement.
Some European companies have received approval for this. However, Indian companies are yet to receive export clearances. This has raised concerns that production will come under pressure. Industry officials say that by early June, the current inventory level may end.
What steps is India taking?
In response, a delegation of the Society of Indian Automobile Manufacturers (SIMA) and automotive component manufacturers association (ACMA) is preparing to visit China. Their aim is to meet chinese officials and get initial approval.
The Economic Times report claims that India’s ministries of commerce and external affairs are actively supporting this link through diplomatic channels.
Why is this metal important for India?
India imported 460 tonnes of rare earth magnets in FY24. Almost all of them were from China and plans to import 700 tonnes this year. Today, there are no big options. As a result, Indian production lines are weak.
India is pushing for domestic production plans to reduce long-term dependence. A meeting is scheduled for June 3. In which the Ministry of Industry will finalize the support infrastructure for magnet production with incentives and infrastructure.
