The Indian auto sector, a vital component of the nation’s economic framework, is facing increased pressure from global challenges. Rajesh Agrawal, Special Secretary, Ministry of Commerce and Industry, pointed out the vulnerabilities revealed by the restrictions on rare earth exports by China. He considers the present circumstances as a significant warning signal to the auto industry.
Speaking at the 65th annual SIAM conference, Agrawal termed the present magnet shortage as a ‘wake-up call,’ highlighting the need for self-sufficiency. He emphasized the urgency to move towards domestic production of essential parts.
Strong demand has been recorded from Africa, Latin America, Australia, the Gulf nations, and New Zealand. However, events like the Red Sea crisis and US tariff policies have caused disruptions to the supply chains. The government is ready to seek solutions, Agrawal confirmed, but active participation of the auto sector in global supply chains is imperative.
India’s auto sector faces a cost disparity of 15% to 19% compared to international competitors. To address this, Agrawal underlined the need for enhanced R&D investments. He believes that technological leadership and innovation will be critical for India’s future growth. These elements will support the country’s objective of reaching a developed status by 2047.
Sudhakar Dalela, Secretary (ER) of the Ministry of External Affairs, also emphasized the importance of an expanded global presence, highlighting that while the domestic market is strong, it’s equally important for the Indian automotive industry to solidify its presence in markets like Africa, Latin America, and developed countries.