Industry Sounds Alarm Over Rare Earth Magnet Shortages
India’s auto component industry, led by the Automotive Component Manufacturers Association of India (ACMA), is calling for a national strategy on critical minerals. This urgent appeal comes amid growing concerns over the shortage of rare earth magnets—essential for electric vehicles (EVs) and advanced mobility manufacturing. The scarcity of these minerals is now seen as a significant threat to the sector’s growth and India’s ambitions in new-age mobility.
“The limited availability of rare earth magnets remains a concern, underscoring the need for a national strategy on critical materials to secure the future of EV and mobility manufacturing in India,”
— Shradha Suri Marwah, President, ACMA.
Impressive Growth Despite Supply Chain Challenges
- The auto components industry reported a turnover of USD 80.2 billion in FY2025, marking a 10% growth over the previous year.
- Over the past five years, the sector has nearly doubled in size, posting a CAGR of 14% from FY20 to FY25.
- Growth has been driven by strong domestic demand, rising exports, and increasing value addition, even as the sector navigates supply chain disruptions and geopolitical headwinds.
Industry’s Response: Agility and Investment in Alternatives
Despite the rare earth shortage, ACMA emphasizes that the industry is agile and proactive. Companies are already investing in alternative solutions, new technologies, and localization to reduce dependency on imports and secure the supply chain for the future.
Government Initiatives: Exploration, Auctions, and the Critical Mineral Mission
- Over 100 critical mineral blocks are set for auction, with exploration expanding into offshore regions rich in polymetallic resources.
- The Geological Survey of India is ramping up exploration, with hundreds of projects targeting rare earths and other vital minerals.
- The recently launched National Critical Mineral Mission (NCMM), with an expenditure of Rs 16,300 crore, aims to reinforce the entire value chain—from exploration and mining to processing and recycling—ensuring India’s self-sufficiency in critical minerals.
- The mission also seeks to foster international partnerships, encourage private sector participation, and accelerate regulatory approvals for mining projects.
The Road Ahead: Securing India’s Mobility Future
Critical minerals are the backbone of modern technologies, from EV batteries to renewable energy systems. As India transitions to clean and advanced mobility, a coordinated national strategy is vital to maintain growth, stay globally competitive, and achieve sustainable development goals.
India’s auto component industry stands at a crossroads—resilient in growth, but in urgent need of mineral security to power the next era of mobility.
