India's EV sector receives supply-chain relief as China approves rare-earth magnet licences for four companies

Four Indian companies have secured licences to import rare-earth magnets from China, offering critical relief to the country's electric vehicle and automotive sectors. Continental India, DE Diamond, Hitachi, and Jay Ushin received clearances from Chinese authorities after submitting end-user certificates ensuring the materials will not be diverted to the United States or used for defence production.

The Ministry of External Affairs confirmed the development on Thursday, marking the first clearances since Beijing imposed stringent export controls in April. The four firms are key suppliers to India's automobile industry, which has been severely impacted by China's curbs on rare-earth materials—essential components in electric motors, braking systems and steering mechanisms.

The licences come with strict conditions prohibiting re-export to the US or military applications. Indian importers were required to obtain endorsements from the Director General of Foreign Trade and Chinese authorities. China controls approximately 90 per cent of global rare-earth magnet production and around 70 per cent of rare-earth mining, making it a dominant force in the supply chain.

India imported nearly 870 tonnes of rare-earth magnets in FY25, valued at approximately ₹306 crore. Neodymium-iron-boron magnets are crucial for manufacturing electric vehicle motors, wind turbines, smartphones and advanced electronics. The approvals signal cautious progress in stabilising the minerals supply chain between the two countries, whilst India continues developing domestic rare-earth processing capabilities through initiatives including the National Critical Mineral Mission and a ₹7,300 crore incentive scheme targeting annual production of 6,000 metric tonnes within seven years.