Carmakers urged to cut imports from China; transition to electric vehicles inevitable

Carmakers dependence on China for components needs to stop, feels govt

In a significant push towards realizing the Make in India policy, India has urged local car manufacturers to stop imports of electric-vehicle components and other automotive parts from China.

A Live Mint report quoted NITI Aayog CEO Amitabh Kant saying that specific automotive components currently being imported from China can be manufactured in India. Kant stressed India’s cost competitiveness and development capabilities so that domestic car companies can manufacture such components in India itself.

Adding that India should not become a significant importing nation in electric-vehicle components, the NITI Aayog chief said India has been dependent on China for magnets used in the motors of EVs, semiconductor-based components, and other electrical parts. Urging car makers to stop this practice altogether, he said companies need to derisk the supply chain by boosting localization, reducing dependency on imports from China.

Last year, clashes between China and India along the Himalayan border prompted New Delhi to diversify its supply chains away from the neighboring nation. Further, Covid-19 and global trade tensions with China have intensified the need for countries worldwide to move manufacturing bases out of the country to reduce supply-chain risks; the report pointed out.

Carmakers told to switch to electric vehicles

The transition towards electric mobility is now inevitable; the NITI Aayog CEO called upon the car companies in the country to “read the writing on the wall” and look toward ensuring a strategic position in the global value chain.

The transition towards an electric vehicle regime has been much slower in India when compared with other nations. Battery models currently account for only 1% of the country’s annual car sales. Many companies in India are still hesitant to effect the transition owing to the lack of adequate charging infrastructure and the high price of electric models. 

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