China has started issuing licences for the export of rare earth magnets to India, offering partial relief to industries dependent on these critical materials, government officials said. The approvals are being routed through Chinese suppliers serving Indian companies as well as Indian units of foreign firms.
Companies that have received or are in the process of receiving approvals include Jay Ushin, Indian units of German auto component maker Continental AG, and suppliers linked to Mahindra, Maruti Suzuki, and Honda Scooters and Motorcycles. Officials said the Chinese Ministry of Commerce has begun clearing applications, though the process remains slow and complex.
China dominates global production of rare earth magnets, which are essential for automobiles, electric vehicles, electronics, medical equipment and defence-related industries. Export restrictions imposed by Beijing since April 4, in response to higher US tariffs, had disrupted supply chains worldwide.
Under the current rules, export clearances are granted only after importers assure that the materials will not be used for defence or dual-use purposes. Indian automakers had earlier flagged concerns that delays in approvals were affecting production schedules, particularly for electric vehicles.
Government officials said India has been engaging with Chinese authorities for the past six months to resolve the issue. During his visit to New Delhi in June, Chinese Foreign Minister Wang Yi had assured External Affairs Minister S Jaishankar that restrictions on rare earth exports would be eased.
Despite initial disruptions, officials said Indian industry has managed to continue production by adapting to delays and exploring alternative arrangements.