Chinese Restrictions On Rare Earth Magnet Exports Tighten, Indian Companies Chase Import Licenses From Beijing; India's Auto Component Industry Uncertain
As Chinese restrictions on rare earth magnet exports tighten, India's auto component industry is facing growing uncertainty. Many Indian companies are seeking import licences from Beijing doubling in just two weeks.
21 Indian firms, up from 11, have applied to China’s commerce ministry for permits to import medium and heavy rare earth magnets in mid-June, Economic Times said.
Some of the Indian companies that have filed applications include Bosch India, Marelli Powertrain India, Mahle Electric Drives India, TVS Motor, and Uno Minda. Sona Comstar, which was earlier rejected on procedural grounds, has reapplied and is among those now awaiting Chinese approval, Economic Times reported, citing a senior industry official.
This follows a directive issued by China on April 4, mandating exporters to obtain official clearance, including an end-user certificate from the buyer. The certificate must contain specific declarations, including that the materials will not be used in any form of weapons production.
With Indian officials trying to engage Chinese authorities in dialogue, diplomatic efforts are underway, but progress has been slow. At least 52 Indian-based companies rely on Chinese magnets for supplying parts to the country’s automobile manufacturers, according to data from the Society of Indian Automobile Manufacturers (SIAM). Most of them have completed the paperwork, obtained endorsements for their end-user certificates, and forwarded the documents to their Chinese suppliers. However, they are still awaiting the mandatory export licences from China’s commerce ministry.
European auto component manufacturers have also received clearances, but Indian firms remain stuck in the approval process. While the original Chinese directive was a response to US tariffs under the Trump administration, Washington has since secured a bilateral arrangement for rare earth magnet supply.
“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 to the Economic Times. Industry insiders fear that if licences are not granted soon, production lines could be disrupted.
India imported 870 tonnes of rare earth magnets worth Rs 306 crore in 2024–25, and companies warn that existing inventories may last only until early July.
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