China's Rare Earth Export Restrictions Cause Stagnation in India's Automotive Production

According to Reuters on May 28, reports show that due to China's export restrictions on rare earth magnets, India's automotive production may come to a halt within days. These organizations hope that the Indian government will lobby China to loosen these restrictions.

Indian companies stated that due to rapidly decreasing inventories and the cumbersome process of obtaining new supplies, the global third-largest automotive market is facing an impending disruption.

According to an unpublished document seen by Reuters, the Society of Indian Automobile Manufacturers (SIAM) expressed at a meeting with Commerce Ministry officials last week that the inventory of auto parts manufacturers is expected to be depleted by the end of May.

SIAM is seeking intervention from Prime Minister Narendra Modi's government to help acquire magnets seized at Chinese ports since April 4th.

In the document, SIAM stated: "The production of India's automotive industry is expected to stall starting from late May or early June." This document was submitted at a meeting on May 19th attended by executives from Maruti Suzuki, Mahindra, and Tata Motors.

According to industry estimates, in the fiscal year ending March 31st, India's automotive industry imported 460 tons of rare earth magnets, mainly from China, and is expected to import 700 tons this year, valued at $30 million.

SIAM and the Automotive Component Manufacturers Association of India (ACMA) stated in another document submitted to the Indian government: "Although the cost of importing rare earth magnets for automobiles is negligible, the risk lies in the fact that even the absence of one component can prevent the manufacture of vehicles."

The SIAM document states that Indian companies are concerned about the overly complex import process, which requires approval from various ministries in India and involves providing documents such as the so-called "end-use certificate" to prove that these magnets are not intended for military use.

The SIAM document urged that applications from importers should be approved "within hours," and appealed to the Chinese embassy and the Ministry of Commerce to urgently approve these applications.

Original Source: https://www.toutiao.com/article/1833438787957772/

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