In a move that could ease supply bottlenecks for India’s manufacturing sector, three domestic companies have received the country’s first licences to import rare earth magnets from China, according to a report by CNBC-TV18. The Indian companies to get the nod are Continental India, Hitachi and Jay Ushin, the report stated.
Rare earth magnets are vital to technologies ranging from electric vehicles and wind turbines to smartphones and military systems. However, China’s near-total dominance, controlling about 90% of global production and processing, has long been a geopolitical flashpoint, especially amid ongoing US-China trade tensions.
The approvals reportedly came with a restriction that the imported materials cannot be exported to the US or used for defence-related purposes. The finer details of India’s import conditions remain undisclosed. These companies supply critical components to automakers such as Maruti Suzuki and the development is expected to relieve pressure on India’s automotive and electronics industries.
Beijing recently tightened export regulations, requiring government clearance for even trace quantities of rare earth materials. In turn, the US slapped a 100% tariff on Chinese imports effective November 1.
India’s domestic plans for rare earth minerals
India is fast-tracking efforts to build its own rare earth magnet industry, aiming to loosen China’s near-total grip on the global supply chain. But Beijing’s recent curbs on the export of processing equipment and magnets have thrown a wrench into New Delhi’s self-reliance plans.
Although India holds the world’s third-largest rare earth reserves, it still faces a crucial bottleneck in the form of lack of indigenous processing technology. Much of the specialised machinery needed to extract and refine these critical minerals still comes from China, leaving India caught in the very dependency it seeks to break.