On Wednesday, June 18, 2025, the shares of Indian automobile companies saw a sudden surge. This boom in auto stocks was created when the news came that India is now preparing to import rare-earth magnets from Australia to reduce its dependence on China. This news holds a lot of significance for India’s self-reliance and the future of electric vehicles (EV)!
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Why are rare-earth magnets special?
Rare-earth magnets, such as neodymium iron boron (NdFeB), are very important for today’s technology. These are used in motors used in automobiles, especially electric and hybrid vehicles. Without them, EVs cannot become as efficient and powerful.
India has been importing about 80% of its requirement of rare-earth magnets from China. But, in April 2025, China imposed some restrictions on the export of these important minerals. This had a direct impact on the Indian automobile industry. For example, Maruti Suzuki had to reduce the production target of its first electric car ‘e-Vitara’. Companies like TVS Motor Company and Bajaj Auto had even warned of stopping production.
New partnership with Australia: Dependence on China will be reduced
After these sanctions from China, the Indian government immediately swung into action. Now India is considering increasing the supply of rare-earth magnets from countries like Australia, Argentina and Brazil. Australia has large reserves of these minerals and can become a reliable partner of India.
This move is also part of the National Critical Minerals Mission of the Government of India, which aims to increase the production of these minerals in the country itself and promote recycling. Commerce and Industry Minister Piyush Goyal has described China’s sanctions as a “global wake-up call”, which has forced countries around the world to think about reducing their dependence on China.
Effect of boom in auto stocks: Who shone?
The effect of the news of import from Australia was immediately seen in the Indian stock market. The Nifty auto index topped the index on Wednesday with a gain of 0.51%.
- Key auto stocks such as Asher Motors, TVS Motor Company, and Maruti Suzuki India rose up to 2%.
- Maruti Suzuki stock rose 1.7% to trade at Rs 12,839. Maruti’s stock has gained a total of 19% this year.
- Shares of other auto companies such as Mahindra & Mahindra, MRF, and Bosch also saw improvement.
This rally reflects investor confidence that alternative supplies of rare-earth magnets will allow the Indian auto industry, especially the EV segment, to grow without interruption.
Brighter future for electric vehicles!
The demand for electric vehicles is growing rapidly in India. The shortage of rare-earth magnets directly affects the production of EVs, as these are vital for their motors. The news of supplies from Australia has now eased fears that EV production may slow down. This will help India achieve its target of 30% EV sales by 2030.
India has the fifth largest reserves of rare-earth elements, but we have not been able to fully utilize them yet. The government is now pushing to increase domestic mining and processing, as well as considering recycling of magnets from old EVs.
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Conclusion
The news of rare-earth magnet imports from Australia has given new hope to the entire industry by sending Indian auto stocks soaring. This is not just an immediate benefit, but it will help make India a strong player in the global supply chain and move towards green mobility.
Frequently Ask Question (FAQs)
- What is the main reason for the surge in Indian auto stocks?
- Due to the news of India planning to import rare-earth magnets from Australia to reduce its dependence on China.
- Why are rare-earth magnets important for the automobile industry?
- These are essential for motors and other high-tech components of electric vehicles (EVs), offering high efficiency and compact design.
- When did China ban the export of rare-earth magnets?
- China had imposed export restrictions on some key rare-earth elements in April 2025.
- Which major auto stocks saw a surge on this news?
- Major auto stocks such as Asher Motors, TVS Motor Company, and Maruti Suzuki India gained up to 2%.
- This move is part of which government initiative of India?
- This is a part of promoting India’s self-reliance under the National Critical Minerals Mission (NCMM) and PM Gatishakti National Master Plan.
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