The government has confirmed that selected domestic firms have obtained authorisation to import rare earth magnets from China, marking a significant development for the automotive and electronics sectors. On Thursday at his weekly media briefing, the Ministry of External Affairs spokesperson said that “some Indian companies have received licences for importing rare earth magnets from China”. He added that the government is examining how the alignment of policies between the United States and China might affect India’s interests.
The licences come with strict conditions. Industry sources indicate that recipients must provide end-user certificates to ensure that the magnets will not be re-exported to the US or used in defence production. One report identifies four firms—Continental India, DE Diamond, Hitachi and Jay Ushin—as having secured the licences. Those companies are key suppliers to Indian vehicle manufacturers. The approval follows a period of pressing shortages and intense negotiation over sourcing of these materials.
These magnets, made from rare earth elements such as neodymium and praseodymium and typically formed into neodymium-iron-boron alloys, are crucial for high-performance applications. They play a critical role in electric vehicle motors, wind turbines and advanced electronics due to their strength and resistance to demagnetisation. China dominates the global supply chain: it accounts for roughly 70 % of rare-earth metals mining and nearly 90 % of rare-earth magnet production worldwide.
For India’s automotive industry, which had projected an annual requirement of around 3,600 tonnes of rare-earth magnets in the fiscal year 2025-26, the inability to access supplies threatened to stall operations. Industry data showed that imports could reach 870 tonnes from China alone for that period, highlighting the country’s heavy dependence on foreign supply. The permit backlog had grown dramatically earlier in the year, with firms such as Bosch, Marelli, Mahle and TVS Motor reporting extended waits for Chinese approval.
The new licences therefore offer immediate relief, yet they also underscore the fragile nature of supply-chain resilience. While access has been granted, the accompanying no-export and non-defence usage clauses limit flexibility for Indian firms. The requirement imposes additional administrative burdens and restricts the end-use options of imported magnets. Furthermore, the broader context of global geopolitics complicates the landscape. As Beijing and Washington negotiate rare-earth export controls and as India seeks to chart a strategic path that balances its relationships with both powers, New Delhi is navigating a complex terrain. At the briefing, the spokesperson reiterated that the country must factor in evolving global dynamics when making procurement decisions.
Meanwhile, Indian companies are ramping up efforts to develop domestic magnet production as a strategic hedge. One leading automotive components firm, which is the country’s largest importer of rare-earth magnets, has announced plans to build local production capacity. The government has introduced incentive programmes to encourage such manufacturing. That strategy aims to reduce reliance on imports and strengthen industrial autonomy over the medium term, given that mining, refining and magnet manufacturing are resource-intensive and time-consuming undertakings.
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