First Indian company to be rejected by China, for import application for rare earth magnets

India's auto component company Sona Precision Forgings (Sona Comstar) has not received permission to import rare earth magnets (REMs) from China. This move was made in late May and it is the first instance of a setback to an Indian firm by China's new stringent rules of export control. China has put in place new licensing on the export of sensitive items such as REMs in April, and it has generated concern in the Indian auto components industry.

According to Jagran sources, Sona Comstar had submitted two applications - one of which has been rejected and the other is still under consideration. The company can re-file the same rejected application. Experts believe that this rejection should not be given much importance because Sona Comstar was the first to come forward in this process and had completed all the documents on time.

Not only Sona Comstar, but many other companies around the world are also getting similar answers from China. Many countries are now trying to solve this problem at the diplomatic level. Companies are re-applying so that the obstacle of essential supplies can be removed.

Sona Comstar supplies important parts to many big Indian and foreign auto brands like Ford, General Motors, Toyota, Hyundai, and Volkswagen. In India, this company provides parts of electric and hybrid vehicles like traction motors, differential assemblies, and motor control units to companies like Maruti Suzuki, Bajaj Auto, and TVS Motor. Its role is considered very important in the supply chain of the country's auto sector.

According to media reports, no official statement or clarification has been received from Sona Comstar on this issue. However, they were contacted through email.

Under China's new export licensing rules, companies that want to import sensitive materials like rare earth magnets now have to provide an end-use certificate. It has to be told where and how these materials will be used. Chinese officials approve the shipment only after thoroughly checking these documents.

In view of this entire situation, many Indian auto parts manufacturing companies are now trying to convince China that their REM imports are completely for civil and commercial use. For this, a delegation is planned to be sent to China, but so far no date has been fixed for meeting Chinese officials.

Under China's new export licensing policy, firms wishing to bring in sensitive goods such as rare earth magnets are now required to furnish an end-use certificate. Where and how these goods will be used must be communicated. Chinese authorities approve the shipment only after verifying these documents in detail.

Auto industry reactions to this issue have been varied. Maruti Suzuki has said that there is no immediate impact on their production process in India. However, their parent company, Suzuki Motor Corporation, has stopped the production of the Swift car in Japan for some time. Probably due to the shortage of rare earth components.

TVS Motor and Bajaj Auto have expressed more concern about the situation. TVS has said that their production may be affected from June or July. The company's MD, Sudarshan Venu, said that the cost burden on customers will increase. At the same time, Bajaj Auto has also warned of low inventory and major disruption in production if the supply is not restored soon.