Indian Firms Get First Licences To Import Key Rare Earth Magnets From China After Months Of Strict Export Curbs: Report

Four Indian companies, including D E Diamond, Hitachi, and Continental India, have received the first set of licences to import rare earth magnets from China, signalling a slight easing of Beijing’s export restrictions imposed earlier this year, the Indian Express reported.

These conditional approvals mark the first clearances since China introduced stringent export controls in April, affecting automakers globally, including India’s electric vehicle (EV) sector.

The restrictions, though not a complete ban, had made it difficult for Indian manufacturers to procure neodymium-iron-boron (NdFeB) magnets, critical components used in electric motors, braking systems, and steering mechanisms.

As inventories ran low, Indian EV makers warned of potential shortages, price hikes, and production delays in the fast-growing but cost-sensitive domestic market.

To address these bottlenecks, India’s automobile industry initiated discussions with the government to streamline import approvals and meet China’s complex requirements.

Importers were required to assure Chinese suppliers that the magnets would not be used for defence applications, with multiple authorisations needed from both Indian and Chinese authorities, including endorsements from the Director General of Foreign Trade (DGFT) and the Chinese Embassy.

China’s export curbs were part of a broader response to US-led tariff measures, restricting exports of several critical minerals and materials. Despite efforts to diversify sourcing, Indian firms remain heavily dependent on China, which dominates rare earth processing, an area where countries like the US and Japan once led.

Recent reports suggest Beijing may be gradually approving limited export permits to select producers, including suppliers to global automakers like Volkswagen.

The new Indian import licences reflect cautious optimism that trade flows could improve, even as the global automotive industry seeks long-term alternatives to China’s near-monopoly on rare earth magnet supplies.

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