China’s hold on rare magnets sends Indian industry supply in tailspin! The count of Indian firms seeking permits from China’s commerce ministry for rare earth magnet imports has risen to 21 from 11 in a fortnight. This development follows China’s April 4 directive requiring exporters of medium and heavy rare earth magnets to obtain a commerce department licence after securing an end-user certificate from the purchaser. The certificate requires specific assurances from buyers.According to an ET report, the applicants include Bosch India, Marelli Powertrain India, Mahle Electric Drives India, TVS Motor and Uno Minda. Following a procedural rejection, Sona Comstar has submitted a fresh application and is now amongst the 21 companies awaiting approval, confirmed a senior industry official.Data from the Society of Indian Automobile Manufacturers shows that 52 India-based companies depend on Chinese magnets for supplying to automobile manufacturers across the country.Also Read | ‘No basis to seek…’: US disagrees to India asking for WTO consultations on auto tariffs; calls it ‘essential security exception’An official was quoted as saying, “These companies have duly filled in and got endorsed the end-user certificate and shipped the requisite documents to their suppliers for procuring rare earth magnets from China, but licences are yet to be awarded by the government there.”
Sticky situation on rare magnets
The certificates stipulate that these materials will not be utilised for storing, manufacturing, producing or processing weapons of mass destruction and their delivery systems.
Rare Earth Problem: India hit due to US-China tariff friction
Indian diplomatic officials are attempting to engage with Chinese authorities to address the issue through dialogue, but progress remains limited thus far, according to sources.Despite originating as a response to US President Donald Trump’s tariffs, the US has now secured a bilateral agreement with China for rare earth magnet supply.European automotive component manufacturers have received approval for rare earth magnet sourcing, but their Indian counterparts still await clearance from China’s commerce ministry. Experts note that strained political and business relations between the two countries complicate the situation.Industry participants are concerned about potential production disruptions if licensing delays continue, as inventory levels are expected to deplete by early July. India’s imports of rare earth magnets totalled 870 tonnes, valued at ₹306 crore in 2024-25. “While the value of imports compared to the industry size is minuscule, vehicles cannot be manufactured even if we are short of one component where a rare earth magnet is being used,” said an executive.Also Read | Big worry! China’s grip over rare earth magnets sends Indian auto industry into a spin; delegation of industry people eye China visit
