India's EV Ambitions: Rare Earth Dependency Sparks Supply Chain Concerns

India's aspirations to become a global hub for electric vehicles (EVs) are facing challenges due to China's recent tightening of export rules on rare earth metals. This situation sheds light on the fragility of India's supply chains, according to a report by Primus Partners, a global management consulting firm.

China's new export restrictions, announced on April 4, have already begun delaying magnet shipments to India, which are crucial for the country's EV growth. The report indicates that India's EV surge heavily relies on rare-earth materials predominantly controlled by China, emphasizing the need for a home-grown solution.

Despite having the world's fifth-largest reserves of rare-earth materials, India lacks the necessary infrastructure for oxide separation, metal refining, and magnet production. The report suggests addressing these vulnerabilities by scaling domestic production, diversifying external supplies, and accelerating recycling initiatives to achieve long-term stability.