China’s rare-earth curbs expose fault lines in India’s EV supply chain

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July 2025
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This story belongs to the Fortune India Magazine July 2025 issue.

China’s curbs on rare-earth element exports have hit India’s auto manufacturers hard. What lies ahead?
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Maruti Suzuki India Ltd Fortune 500 India 2024

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China’s rare-earth curbs expose fault lines in India’s EV supply chain
The disruption comes at a time when the domestic passenger vehicles market is expected to see low single-digit growth. Credits: Getty Images
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When Maruti Suzuki , India’s largest maker of passenger vehicles, reported its sales figures for May recently, the air was fraught with uncertainty. China’s tight curbs on the export of rare-earth elements—which came into effect in April—were ringing alarm bells across the Indian automobile industry.

Therefore, it did not come as a surprise when Rahul Bharti, executive director of corporate affairs at Maruti Suzuki, faced a barrage of questions on the runway the carmaker had before the disruption in the supply of rare-earth magnets began impacting production, especially that of the e-Vitara, its first battery electric vehicle (BEV) slated for a launch in September. The vehicle is pivotal to Suzuki’s ambitions of making India a production hub for BEVs. Bharti said the company will inform all stakeholders should there be any impact.

Barely 10 days later, reports emerged that Maruti Suzuki had slashed production targets of the e-Vitara by two-thirds in H1FY26. A significant portion of the vehicles had been earmarked for export to key markets, including Europe and Japan.