Indian auto delegation awaits China’s approval for rare earth magnet talks

China has mandated special export licences for seven rare earth elements and related magnets. The country controls over 90 per cent of the global processing capacity for magnets, used across sectors, including automobiles, home appliances and clean energy

New Delhi: Indian Auto industry representatives are yet to leave for China to expedite the import of rare earth magnets as the delegation is still awaiting a formal go-ahead from the Chinese commerce ministry for a meeting, as per industry sources.

Around 40-50 industry executives have received visas last month, but are still awaiting a formal nod from the Chinese authorities for the meetings on the matter. Staring at shortages, the domestic automobile industry has also sought government support in expediting approvals from China to import rare earth magnets.

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“They (Chinese authorities) have not given any appointment so far, so the delegation is yet to leave. Situation is bad as not even a single license has been issued to us so far,” a source told PTI.

If the situation remains like this, the domestic automobile industry will be staring at shortages resulting in significant production losses, the source added. The domestic auto industry is forced to take steps as the Chinese government has put restrictions since April 4 this year on the export of rare earth elements and related magnets.

China has mandated special export licences for seven rare earth elements and related magnets. The country controls over 90 per cent of the global processing capacity for magnets, used across sectors, including automobiles, home appliances and clean energy.

The critical materials include samarium, gadolinium, terbium, dysprosium and lutetium, which are essential in electric motors, braking systems, smartphones and missile technology.

Rare earth magnets are integral to permanent magnet synchronous motors (PMSMs) used in EVs for high torque, energy efficiency and compact size.

Hybrids also depend on them for efficient propulsion. In internal combustion engine (ICE) vehicles, the use of rare earth magnets is largely limited to electric power steering and other motorised systems.

In April this year, China, the world’s dominant exporter of rare earth magnets, imposed export restrictions on seven rare earth elements and finished magnets, mandating export licences.

The revised framework demands detailed end-use disclosures and client declarations, including confirmation that the products will not be used in defence or re-exported to the US. India, which sourced over 80 per cent of its 540 tonnes of magnet imports from China last fiscal, has started to feel the impact.

By May 2025, nearly 30 import requests from Indian companies were endorsed by the Indian government, but are yet to be approved by the Chinese authorities, and no shipments have arrived.