India-China Diplomatic Thaw Sparks Optimism Among Automakers for Easier Access to EV Components

A gradual thaw in diplomatic relations between India and Beijing is raising expectations within the Indian automobile industry that restrictions affecting access to Chinese technology, components, and business partners could ease. The sector is closely observing upcoming diplomatic engagements, including the expected visit of Chinese President Xi Jinping for the BRICS summit in New Delhi next month, following the 25th round of Special Representatives' talks held between National Security Adviser Ajit Doval and Chinese Foreign Minister Wang Yi.

For the automotive industry, the significance of these diplomatic talks extends beyond border matters. China has established itself as a primary source for electric vehicle platforms, battery cells, power electronics, electric powertrains, and rare-earth permanent magnets. As Indian manufacturers expand their portfolios to include electric vehicles, hybrids, plug-in hybrids, and range-extender vehicles, their reliance on Chinese supply chains has grown.

Data from the Automotive Component Manufacturers Association of India (ACMA) highlights this reliance. In the previous financial year, India imported auto components worth $17.75 billion from Asia—marking a 19 percent growth from the prior year—with China accounting for 36 percent of these imports, followed by Japan at 11 percent and South Korea at 7 percent. Industry stakeholders note that battery cells, critical electricals, and rare earth magnets represent areas of heavy dependency.

Beyond supply volumes, visa restrictions have emerged as a significant operational hurdle for companies requiring regular interaction with Chinese engineering teams and suppliers. Industry veterans report that securing technical visas remains difficult, limiting travel even for trade fairs compared to previous years. Additionally, regulatory shifts have altered import formats; for rare-earth magnets, recent policies permit the import of fully assembled rotors or finished motors rather than individual parts for domestic assembly.

Major Indian automakers including Mahindra & Mahindra, Maruti Suzuki, and Tata Motors are actively working to scale their electric vehicle capabilities, while companies such as Stellantis, Nissan, and JSW are pursuing partnerships involving Chinese technology. Existing collaborations include Tata AutoComp Systems' joint venture with China's Gotion, and various imports of blade cells from BYD by domestic players. Meanwhile, Stellantis is introducing China's Leapmotor brand to India, and Nissan has explored products through its joint venture with Dongfeng Motor.

Industry analysts emphasize that securing components is only part of the equation, as access to know-how remains vital for long-term localisation. Puneet Gupta, Director of Sales and Powertrain Forecast for India & ASEAN at Mobility Global, noted that India's priority should focus on building a competitive EV ecosystem by remaining open to global partnerships, including mainland China, to strengthen domestic supply chains.

At the same time, component executives suggest that tighter export controls from China reflect a broader pushback against India's strict domestic value-addition mandates, as suppliers prefer exporting finished products over transferring foundational technologies.

"The Indian automotive sector's transition toward electric and hybrid vehicles heavily relies on a stable supply of critical components like battery cells and rare-earth magnets. While domestic manufacturing and value addition remain long-term strategic goals for India, practical access to global technology and streamlined supply chains is essential in the interim. A constructive diplomatic dialogue can ease operational friction, helping automakers accelerate localisation and scale their EV ecosystems more efficiently." — Dr. Shishir Gupta, Founder & CEO, StartupLanes