China has started limited approvals for rare earth magnet exports to India after months of supply strain. The move follows repeated industry warnings about material shortages affecting vehicle and electronics production.
Indian manufacturers rely heavily on Chinese supplies for motors and precision components. Thus, the approvals bring measured relief, while uncertainty remains across supply chains. The news remains focused on export licensing and its role in stabilising trade flows.
China Begins Limited Licensing for Rare Earth Magnet Exports to India
China has started issuing export licences for rare earth magnets to selected Indian importers. The approvals come after strict controls were introduced earlier in the year. Only a limited number of applications have received clearance so far. The process is being handled by China’s Ministry of Commerce.
The licences cover suppliers connected to Indian automotive and electronics manufacturers. Companies include Jay Ushin and Indian units of Continental AG. Moreover, suppliers serving firms such as Mahindra and Maruti Suzuki are also included. Many applications, however, remain pending with no fixed timelines.
Essentially, Chinese authorities require detailed end use declarations before approving shipments. Exporters must confirm that materials will not be used for defence purposes. Officials say the review process remains detailed and time-consuming. This approach reflects continued caution rather than a full easing of controls.
Auto and EV Manufacturers Seek Supply Stability
Rare earth magnets are used in electric motors and steering systems. They are also critical for braking components and electronic controls. Indian auto and EV producers faced delays after licensing rules tightened. Production planning became more complex across several manufacturing hubs.
Industry bodies had raised concerns with Indian ministries earlier this year. Manufacturers warned that prolonged delays could disrupt vehicle output. Some firms adjusted sourcing plans to maintain assembly schedules. Others relied on inventory optimisation to bridge short-term gaps.
Furthermore, government officials stated that production has largely continued so far. Alternative procurement methods were used where possible. However, exposure remains due to heavy reliance on imported magnets. Companies continue to monitor the pace of Chinese approvals closely.
Global Supply Chain Context and Ongoing Controls
China controls nearly 99% of global rare earth magnet production. Its export policies strongly influence global manufacturing supply chains. The licensing system was introduced amid rising trade tensions with the United States.
A number of countries had experienced delays following the implementation of the rules. With the existing system, every delivery must be approved separately. The buyers, suppliers, and the ultimate uses should be documented. This has made cross-border trade of critical raw materials to be sluggish.
According to the Indian importers, there is no predictability and speed in the process. According to the officials, additional approvals can be made in phases. The frequency and quantity of licences are currently unknown. Manufacturers are looking forward to further controls in the short run. However, this stability in the long run relies on the stable clearance of exports.
