Rare earth supply chain disruption has caught the attention of top ministers, as per reports on CNBC-TV18. The Prime Minister’s Office (PMO), Ministry of Heavy Industries (MHI), Ministry of External Affairs (MEA), and the Commerce Ministry are jointly assessing the impact of China’s restrictions on rare earth magnet exports.
According to the CNBC-TV18 report, the government may consider sending an industry delegation to Beijing. The objective is to seek clarity from China’s Commerce Ministry on the new permit system. This move is being seen as a step to ease supply bottlenecks and prevent further disruption.
Earlier on June 2 a Reuters report quoted Heavy Industries Minister, HD Kumaraswamy telling reporter that the government was preparing to send a delegation of industry executives to China in 2-3 weeks to discuss the issue with authorities there.
India received no import approvals since April 4
The CNBC-TV18 report suggests that No Indian company has received approval to import rare earth magnets from China since April 4. The delay follows a new export rule introduced by Beijing, which now requires importers to obtain permits from Chinese authorities. These new regulations have left Indian manufacturers stranded, with even low-end magnets held up due to confusion over implementation.
The critical materials—including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—are essential in electric motors, braking systems, smartphones, aerospace components, and missile technology.
Rajat Mahajan, Partner and Automotive Sector Leader at Deloitte India had highlighted the seriousness of the issue and pointed out that, “there is not enough rare earth magnets to recycle at this point in time to satisfy the EV volumes. It will not be easy for the OEMs to suddenly change course on Powertrain as well as on alternate material. This situation will hopefully get resolved via diplomatic channels, but if it continues, then we may see a shift towards powertrains for large OEMs.”
Trump tariffs behind China’s export restrictions
Industry observers are of the opinion that China’s new rules on rare earth magnet exports are perhaps in response to tariffs imposed by US President Donald Trump. India is not bearing the brunt alone. Many countries that heavily rely on China for rare earths—including India, Japan, Europe, and the US—are urgently seeking diplomatic talks with China to expedite export licenses.
China produces 90% of world’s rare earth minerals
A Reuters report highlighted that China produces around 90 per cent of the world’s rare earth minerals, making its export policies critical for global supply chains.
The Indian government is now closely monitoring the situation and weighing its diplomatic and trade options to secure uninterrupted access to these crucial materials.
