Bajaj Auto’s Executive Director Rakesh Sharma has raised concerns over a looming shortage of rare earth magnets, critical components in electric vehicle (EV) motors, which could severely disrupt the company’s production by July if import bottlenecks are not resolved.
Speaking at a media briefing, Sharma highlighted the complex and restrictive approval process required for importing these materials from China, which dominates global rare earth magnet production. He explained that import requests must include an end-use declaration confirming non-military applications and undergo approval from multiple Indian ministries, the Chinese embassy, and Chinese authorities.
“Despite over 30 applications submitted by the Indian auto industry, none have received clearance yet,” Sharma said. “Chinese authorities indicated the process could take 40 to 45 days, but that timeline has not materialised. As we speak, supplies are depleting, and July production could be seriously affected if relief does not arrive.”
Sharma emphasized that this issue affects the entire Indian automotive industry, which relies heavily on Chinese imports for rare earth magnets. While India and other countries have rare earth reserves, extraction and refining require long-term investments and expertise. “There’s no immediate substitute. Developing alternatives involves redesigning components and validating performance, which isn’t possible in the short term,” he noted.
He added that achieving self-reliance will take time, investment, and policy support. “There’s no easy way to become less dependent on a single source. It’s a new area of concern, and as we navigate it, we hope to gain clarity.”
Financially, the crisis threatens the momentum of India’s EV transition. However, Sharma remains cautiously optimistic that the situation may ease through streamlined import processes, alternative supply chains, or technological developments.
In response to the growing urgency, industry bodies such as SIAM (Society of Indian Automobile Manufacturers) and ACMA (Automotive Component Manufacturers Association) have urged the Indian government to fast-track permits and engage with Beijing to release pending shipments.
China, which refines over 90% of the world’s rare earth magnets, imposed new export rules in April 2025, initially interpreted as a reaction to US tariffs, that are now causing ripple effects across global automotive supply chains.
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