China lifts ban: India resumes rare earth magnet exports, EV sector to get major boost

New Delhi (The Uttam Hindu): After a six-month halt, China has resumed supplies of heavy rare earth magnets to India. These powerful magnets are used in industries such as electric vehicles, renewable energy plants, and consumer electronics. The resumption of supplies has brought significant relief to Indian companies, as a shortage of these magnets had disrupted many production plans.

China controls approximately 90 percent of this market worldwide, so any restrictions it imposes have a ripple effect on the global industry. Now that Beijing has resumed exports, it is expected to revive India's EV and technology sector.

According to an ET report, this relief does not come without conditions. China has clarified that the rare earth magnets received by India cannot be re-exported to the US, nor will they be used for any military or defense purposes. Beijing has demanded a guarantee from India that the material will be used only for domestic needs.

The reason behind this move is believed to be ongoing trade tensions between China and the United States. During a recent meeting between US President Donald Trump and Chinese President Xi Jinping, the two countries agreed to de-escalate tensions, although restrictions on strategic goods remain in place.

Currently, four companies in India—Hitachi, Continental, J-Ushin, and DE Diamonds—have been granted permission to import from China. These companies have obtained all necessary approvals from Chinese exporters and Indian authorities. Signs of supply resumption have raised hopes within the industry. Additionally, direct flights between India and China, including Kolkata and Guangzhou, have also resumed, which is expected to boost trade activity.

China demands end-user guarantees.

China requires every buyer to provide an end-user certificate, which clearly states that the purchased material will not be used in weapons or devices of mass destruction. Indian companies had already submitted these certificates, but more than 50 applications were awaiting approval at China's Ministry of Commerce. Now, some of these have been approved, allowing supply lines to resume.

Why are rare earth magnets important?

These extremely powerful magnets are considered the backbone of modern technology. They are used in electric vehicle motors, wind turbines, mobile phones, laptops, and even aerospace equipment. In India, the EV sector is the largest consumer. In FY25, India imported approximately 870 tonnes of rare earth magnets, worth approximately ₹306 crore.