India is confident that the diplomatic and commercial engagement with China to ease the supply of rare earth magnets and other critical minerals will have positive results, a senior official said Monday.
“Since the export control on rare earth metals — specifically magnets — is impacting (us), we are engaged with both Automotive Component Manufacturers Association (ACMA) and Society of Indian Automobile Manufacturers to facilitate their discussions with Chinese counterparts,” commerce secretary Sunil Brthwal told reporters.
“At the diplomatic level also the ministry of external affairs and ministry of commerce and industry are engaged with China. All efforts are being made to make these essential items of import come to India,” he added.
The Chinese Ministry of Commerce and General Administration of Customs in early April had announced the decision to implement export controls in certain rare earth elements. These export controls came on April 4 in response to the tariff war inaugurated by US President Donald Trump through reciprocal tariffs on all the trade partners of the US. China was specifically singled out for harsher tariffs than most other countries.
Now exporters of seven rare earth minerals and magnets have to seek license to export these items which are crucial in auto, defence, semiconductors, aivation, defence and other critical sectors. The licenses are issued once the Chinese authorities are satisfied that these dual use minerals will be used for the purposes it was declared and not in other strategic areas.
China controls 70% of Rare Earth Elements (REE) production and 90% of processing. Delays in REE shipments for Indian auto OEMs can impact electric, Internal Combustion Engine (ICE) and hybrid vehicle production starting in July 2025, particularly higher-end models that depend on REE-based technologies.
Various domestic suppliers have already sought approval from the Chinese government through their local vendors in China to source the rare earth magnets and submitted the end-use certificates to support their case. Reports also say that around 21 Indian companies have applied for the Chinese government approval.