China’s tightened grip on uncommon earth metals is already hitting the Indian auto business: automakers are stripping again tools. Royal Enfield has tried out a brief hack for its gear place sensor as the worldwide shortages chunk, exposing vulnerabilities in car provide chains. Different automakers too are reducing down on sure non-essential tools of their automobiles to scale back the utilization of uncommon earth supplies as uncertainty over China’s inexperienced mild to export the important thing supplies looms.
In a missive to new clients, Royal Enfield mentioned that it had “quickly put in” a impartial indication system within the bike because of the “ongoing international scarcity of rare-earth supplies, that are key to manufacturing the magnets in gear place sensors”. “We’re working to mitigate these provide chain points and, as quickly because the Gear Place Sensor is on the market, we’ll retro-fit it in your motorbike at no further value,” the corporate mentioned.
A supply conscious of the event mentioned that it was unclear when the corporate would be capable of supply the sensor, however was taking a look at geographies past China.
Chinese language curbs on essential minerals
Following US President Donald Trump’s tariff onslaught on different international locations in April, China applied particularly designed bureaucratic hurdles for international corporations trying to supply essential minerals from the nation. The supplies are essential for the car sector, and Indian carmakers’ functions to safe them from China have proved to be unsuccessful thus far.
Royal Enfield didn’t reply to a request for remark.
A big Indian carmaker is learnt to have tweaked its central console to dispose of the gear place indicator in its computerized fashions as a cease hole measure to rationalise uncommon earth magnet provides for extra important functions, together with computerized transmissions, throttle our bodies, sensors, seat belts, energy steering, energy home windows and cameras.
It’s learnt that in June 2025, the Indian arms of a European automaker had their software for uncommon earth magnet shipments from China rejected, whereas functions made by the European headquarter acquired approvals. Whereas the Chinese language authorities has not imposed an outright ban on the export of uncommon earth magnets—a vital factor in making electrical automobiles—the method has been made very troublesome, which may take up a very long time and pose scarcity dangers within the meantime.
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Some functions had been routed by the Ministry of Commerce (DGFT), however then Beijing insisted that it’s forwarded by India’s Ministry of Exterior Affairs, with end-use certifications being insisted upon normally by the Chinese language facet. The back-and-forth has result in sharply elevated sourcing timelines and uncertainty over provides.
The restrictions on uncommon earth magnet and associated supplies imposed by China has led to car producers, particularly EV makers, gazing a possible scarcity of the essential elements, which raises issues of value hikes and manufacturing delays in a nascent, cost-sensitive phase of the auto market. That is particularly so for neodymium-iron-boron (NdFeB) magnets utilized in EV motors.
Rising want
Consumption of everlasting magnets has grown considerably in India over the past 5 monetary years—from simply 12,400 tonnes in FY21 to twenty-eight,700 tonnes in FY24, earlier than imports surged 88 per cent to 53,700 tonnes in FY25.
Uncommon earth parts magnets are likely to retain their properties nearly completely, and they’re far lighter than conventional magnets made out of iron. Whereas the supply of uncommon earth metals shouldn’t be restricted to China, it’s within the environment friendly processing of those essential parts the place Beijing has a considerable lead, which was as soon as loved by the US and Japan.
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In response to the US administration’s reciprocal tariff warmth, China restricted exports of seven heavy uncommon earth metals together with samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, in addition to uncommon earth magnets. Earlier, it had additionally banned exports to the US of gallium, germanium, antimony, and different key high-tech supplies with potential navy functions.
Nevertheless, with the current diplomatic breakthrough beneath which India and China have introduced a slew to measures in a seeming thaw within the tense ties, automakers are hopeful that the restrictions on uncommon earth supplies may see some easing.
Responding to questions on the problem in July, MEA official spokesperson Randhir Jaiswal had mentioned, “On uncommon earths, sure, now we have been in contact with the Chinese language facet each in Delhi as additionally in Beijing and we’re speaking to them as to how we are able to streamline the provision chain problem on uncommon earths.”
Presently, IREL (India) Ltd, a PSU beneath the Division of Atomic Vitality, refines uncommon earth oxides from heavy metallic ores, containing REEs like cerium, lanthanum, neodymium, and praseodymium. Nevertheless, manufacturing is proscribed. Furthermore, the processing of refining oxides into alloys—after which into magnets—is very technical and nearly non-existent in India.