India’s automotive and electronics industries are facing severe disruptions due to China’s tightened export restrictions on rare earth magnets, prompting the Ministry of Heavy Industries to send a high-level delegation to Beijing in the next 2-3 weeks. The delegation aims to resolve shipment delays and secure stable supplies of these critical components.
China’s Export Restrictions:
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New licensing requirements introduced in April 2025 have slowed approvals, leaving Indian-bound shipments stranded at Chinese ports.
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China controls 90% of global rare earth magnet production, making Indian manufacturers highly dependent on imports.
Industry Delegation to Beijing:
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Representatives from Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association (ACMA) will meet Chinese officials to expedite approvals.
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India’s Commerce and External Affairs Ministries are coordinating efforts through the Indian Embassy in Beijing.
Impact on Indian Auto & EV Sector:
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Inventories of rare earth magnets used in electric motors, steering systems, and brakes are depleting rapidly, threatening production halts by early June.
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Leading automakers like Tata Motors, Mahindra, and Bajaj Auto have raised concerns over supply chain disruptions.
Government’s Long-Term Strategy:
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India is accelerating domestic rare earth magnet production, with a high-level meeting scheduled for June 3 to finalize financial incentives for local manufacturers.
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Plans include public-private partnerships to establish rare earth processing facilities and alternative sourcing strategies.
Global Context:
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The US and European automakers are also facing shortages, as China’s export curbs disrupt global supply chains.
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India imported 460 tons of rare earth magnets in FY24, with plans to increase imports to 700 tons this year.
India’s delegation to China marks a critical diplomatic and industrial effort to restore rare earth magnet supplies, ensuring continued production in the fast-growing EV and electronics sectors.
Source: Business Standard, Financial Express, MSN, Economic Times, and Reuters.