India to Facilitate Access to Rare Earth Magnets Amidst Chinese Restrictions
India is stepping up to facilitate access for automakers to rare earth magnets as restrictions from China pose challenges. A delegation from the automotive sector is planning to visit China, seeking to expedite approvals required for imports. Meanwhile, the number of Indian companies awaiting licenses has nearly doubled, raising concerns about potential production impacts if delays continue.
India is contemplating a supportive role for automakers regarding the supply of rare earth magnets, as recent restrictions from China have triggered concern in the auto sector. According to a senior official, Commerce Secretary Sunil Barthwal recently consulted with auto industry representatives, signaling the government’s intention to help facilitate easier access to these vital materials rather than engaging in direct negotiations between governments.
In the coming weeks, a delegation from India’s auto industry is set to visit China, backed by the Indian embassy in Beijing, to strengthen communication with Chinese authorities. The official mentioned that stakeholders and ministries will work together to help accelerate the approval process, as the industry has already submitted necessary documents.
China’s recent mandate requires exporters to obtain licenses for shipping medium and heavy rare earth magnets, contingent on the end-user certificate from buyers. This certificate obliges buyers to ensure that the imported materials will not be involved in any activities related to weapons of mass destruction. While the order emerged as a response to U.S. tariffs under the Trump administration, a recent U.S.-China agreement ensures the continued flow of rare earth magnets to America.
European automotive manufacturers, unlike their Indian counterparts, have apparently secured approvals to source rare earth magnets from China, which only amplifies the frustrating delays faced by Indian companies amidst an already complex political relationship with their Chinese counterparts. Many domestic firms are striving to establish in-house capabilities to curtail reliance on imports, yet experts warn of the monumental hurdles ahead.
Alok Perti, a board advisor at the MMPI, emphasized that developing local sourcing is essential but fraught with challenges, mentioning that significant investments are needed. Furthermore, he highlighted the dangers associated with extracting radioactive materials in this context. Both government initiatives, such as viability gap funding, and collaboration with countries like Russia and Australia, are seen as crucial elements in this endeavor.
Rare earth magnets are indispensable for permanent magnet synchronous motors (PMSMs), which are key components in electric vehicles due to their torque and energy efficiency. Current reports indicate that the number of Indian companies waiting for approval from the Chinese commerce ministry has surged to 21, up from 11 just two weeks prior. Notable names like Bosch India, TVS Motor, and Sona Comstar are in the fray, with Sona Comstar recently reapplying after a prior rejection due to procedural issues.
Auto industry associations, such as the Society of Indian Automobile Manufacturers (Siam) and the Automotive Components Manufacturers Association (ACMA), are reportedly in close contact with government officials regarding these delays. Despite following the required protocols and submitting applications to Chinese authorities, companies are feeling the pressure as approvals remain pending. Throughout his recent visit to India, Chinese vice foreign minister Sun Weidong held talks with Indian officials, leaving industry insiders hopeful for a positive outcome.
However, time is of the essence. Industry professionals warn that without timely issuance of licenses, production could be jeopardized with current magnet stocks running low by early July.
In the previous financial year, India imported around 870 tonnes of rare earth magnets valued at ₹306 crore, reflecting a significant dependence on these materials for the automotive sector and beyond.
To wrap it up, India’s effort to facilitate easier access to rare earth magnets for its automobile industry comes amidst complex trade dynamics with China. With many firms still awaiting necessary approvals, there are growing concerns over the timelines and the potential impact on production. As the Indian government steps in to broker dialogue and encourage local capabilities, significant challenges, particularly in investment and technology, remain. The situation is critical, with industry stakeholders closely monitoring developments, emphasizing the urgency of the approval process.
Original Source: m.economictimes.com
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