India Sends Industry Delegation to China Amid Rare Earth Magnet Supply Crisis

Image Source: Business Standard

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:

New licensing requirements introduced in April 2025 have slowed approvals, leaving Indian-bound shipments stranded at Chinese ports.
China controls 90% of global rare earth magnet production, making Indian manufacturers highly dependent on imports.

Industry Delegation to Beijing:

Representatives from Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association (ACMA) will meet Chinese officials to expedite approvals.
India’s Commerce and External Affairs Ministries are coordinating efforts through the Indian Embassy in Beijing.

Impact on Indian Auto & EV Sector:

Inventories of rare earth magnets used in electric motors, steering systems, and brakes are depleting rapidly, threatening production halts by early June.
Leading automakers like Tata Motors, Mahindra, and Bajaj Auto have raised concerns over supply chain disruptions.

Government’s Long-Term Strategy:

India is accelerating domestic rare earth magnet production, with a high-level meeting scheduled for June 3 to finalize financial incentives for local manufacturers.
Plans include public-private partnerships to establish rare earth processing facilities and alternative sourcing strategies.

Global Context:

The US and European automakers are also facing shortages, as China’s export curbs disrupt global supply chains.
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.