Daijiworld Media Network – New Delhi
New Delhi, Sep 28: Despite high-level discussions between India and China earlier this month, on-ground business relations remain tense, with critical issues such as rare earth magnet imports and regulatory approvals still unresolved, industry executives said.
All 51 applications by Indian auto companies to import heavy rare earth magnets from China remain pending, while New Delhi’s restrictions under Press Note 3 and Bureau of Indian Standards (BIS) approvals continue to hold. These magnets are essential for electric vehicle motors, vehicle speed detection systems, and automatic gear shifting components, and their absence has forced companies to seek costly alternatives.
“There has been no movement so far despite high-level talks between India and China,” said a senior auto industry executive, highlighting the slow pace of discussions. Three leading electronic contract manufacturers echoed the sentiment, noting no immediate regulatory relaxations despite positive signals following Prime Minister Narendra Modi’s visit to China and talks with President Xi Jinping.
Some companies remain cautiously optimistic. Jalaj Gupta, Managing Director of TI Clean Mobility, said, “Right now, we are importing motors due to non-availability of heavy rare earth magnets, but we are hopeful the situation will improve in the next couple of months.”
While China initially indicated it would resume shipments, deliveries have not materialized, and India’s regulatory position under Press Note 3 remains firm, allowing only majority-Indian partnerships in foreign direct investments. BIS approvals for Chinese manufacturing units continue to be granted only piecemeal and for limited periods, affecting sectors from electronics to footwear.
Global and Indian automakers have started importing sub-assemblies containing heavy rare earth magnets, and two-wheeler makers are adapting to light rare earth magnets. However, larger three-wheelers still face performance issues due to insufficient torque from lighter magnets.
The granting of business visas to Chinese executives has improved oversight capabilities, but executives caution that full normalization of trade relations will take time. “Talks are ongoing, but sourcing challenges and regulatory bottlenecks continue to impact production and business plans,” an auto industry executive said.
The standoff underscores the complex balance between diplomatic engagement and domestic regulatory safeguards, as Indian companies navigate supply chain disruptions in critical sectors.