China resumes export of rare earth magnets to India with strict caveats; four companies receive approval amid easing US-China tensions
After a six-month pause that strained several Indian industries, China has resumed exports of heavy rare earth magnets to India, bringing relief to sectors such as electric vehicles (EVs), renewable energy, and consumer electronics. The shipments, however, come with a crucial restriction — the magnets cannot be re-exported to the United States or used for military purposes, reported timesofindia.indiatimes.com.
According to reports cited by The Economic Times, the approvals were granted after China verified end-user certificates (EUCs) from the Indian firms, ensuring that the magnets will serve only domestic industrial demand and not be diverted to weapons production or foreign markets.
A senior industry executive confirmed that the approvals are a positive step, adding that the resumption of direct Kolkata–Guangzhou flights this week could further streamline logistics and cargo movements.
Geopolitical backdrop: Rare earths caught in global trade tensions
The move follows renewed diplomatic engagement between US President Donald Trump and Chinese President Xi Jinping, who met earlier this week to discuss trade and supply chain stability. Both countries have been locked in a prolonged dispute that has disrupted global access to critical minerals.
Four Indian firms — Hitachi, Continental, Jay-Ushin, and DE Diamonds — have been granted import licences after receiving clearance from Chinese authorities, marking the first easing in supply since April
On April 4, China imposed export controls on medium and heavy rare earth materials, citing national security reasons after the US increased tariffs. The new regulations require Chinese exporters to obtain licences ensuring that buyers will not use these materials for weapons or related systems.
While shipments to Europe and Southeast Asia had gradually resumed, Indian vendors faced persistent delays until now. Between April and September 2025, India imported 870 tonnes of rare earth magnets worth ₹306 crore, according to ET data.
India’s growing dependence on rare earths
Rare earth magnets are essential components in EV motors, wind turbines, aerospace technology, and defence systems. India’s EV and green energy industries, in particular, depend heavily on a consistent magnet supply. With China controlling nearly 90% of global production, even temporary disruptions ripple through India’s manufacturing ecosystem.
MEA spokesperson Randhir Jaiswal confirmed that Indian firms have begun receiving import licences but noted that geopolitical dynamics could still impact the flow.
“We have to look at how the US and China talks will play into our domain,” Jaiswal cautioned.
What lies ahead
Industry experts believe that while the resumption of shipments offers short-term relief, Indian companies must continue diversifying their sourcing strategy and developing domestic processing capacity to reduce reliance on China.
The latest approvals, combined with ongoing trade diplomacy, signal a cautious thaw in rare earth supply chains — though the long-term stability of imports will depend on broader US-China-India trade relations.
