India's Auto Sector Resilient Amid China's Rare Earth Magnet Restrictions
A recent report reveals India's auto sector is largely unaffected by China's restriction on rare earth magnets, affecting primarily electric and hybrid vehicles. While China controls 90% of rare earth processing, India's auto market, dominated by traditional vehicles, anticipates limited impact from these curbs.
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A recent report by Nuvama highlights India's auto sector's resilience to the recent restrictions on rare earth magnets imposed by China. Over 95% of vehicles in India run on internal combustion engines (ICE), which are minimally affected, unlike electric and hybrid vehicles.
The report points out that while rare earth materials (REMs) are crucial across various industries, the electric vehicle (EV) sector faces the most significant challenges. REM restrictions affect EV motors, with electric passenger vehicles, hybrid vehicles, and electric two-wheelers being impacted in descending order.
China's dominance over 90% of global REM processing adds complexity, with auto manufacturers now required to obtain end-user certification from China, a process taking approximately 45 days. Despite the low current EV adoption in India, experts believe the overall impact on the Indian auto sector remains limited.
(With inputs from agencies.)
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