China opens rare earth exports in big relief to Indian firms
Ministry of External Affairs spokesperson Randhir Jaiswal speaks during a media briefing in New Delhi
| Photo Credit:
PTI
More than six months after it imposed export restrictions on rare earth materials, China has issued licences for exports of rare earth magnets to some Indian companies, the MEA has confirmed.
The one-year trade truce between China and the US, which includes an understanding on rare earth supplies to Washington, has eased the situation further as additional export curbs have been put off, sources tracking the matter said.
The development comes as a relief for the Indian auto and electronics sector, especially EV manufacturers, facing disruption after Beijing restricted supplies in April this year.
“I can confirm that some Indian companies have received licences for importing rare earth magnets from China. As far as there is a question of the recent talks and relaxations between the US and China, I will come back to you on how it’s going to play into our domain,” Randhir Jaiswal, Spokesperson, MEA, said at a media briefing on Thursday.
Chinese President Xi Jinping and US President Donald Trump reached a one-year trade agreement on Wednesday in Busan. “We focused on export controls of China on rare earth, and they’re going to keep those flowing, which is quite important,” Trump had said after the meeting with Xi.
The Indian companies that have got the licences reportedly include Jay Ushin Ltd, De Diamond Electric India Pvt. Ltd, and the Indian units of German automotive component maker Continental AG and Japan’s Hitachi Astemo.
“The news comes as a short-term relief for Indian companies, which were severely impacted by the shortage. Vehicle production was reduced, and new launches were delayed because of the scarcity. However, in the medium to long term, Indian Original Equipment Manufacturers (OEM) should focus on localising and manufacturing in India, which will completely remove the dependence on China,” said Sagar Shetty, Research Analyst, StoxBox, to businessline.
As part of the US deal, Beijing has now agreed to defer by one year the additional curbs it had announced earlier this month on rare earth exports and equipment.
The new additional export restrictions, which were to be implemented from November 9, mandated export licenses for a wide range of rare earth technologies and materials. Importers were also required to furnish guarantees that items would not be re-exported. Deferment of the new restrictions would be a relief for the Indian industry as well.
The April export restrictions, which continue, prescribe that exports of rare earth could happen only after export licences were issued. For this exporters have to secure an end-user certificate from the importer establishing that the imported materials will not be used for weapons of mass destruction or their delivery systems.
“Even after Indian importers met all the conditions and gave the end-user certificates the export licences were not being issued by the Chinese government and supplies were getting delayed. The Indian Embassy in Beijing has been in constant touch with the Chinese government on the matter and it finally seems to be getting resolved now,” a source tracking the matter told businessline.
(With inputs from Aroosa Ahmed in Mumbai)
Published on October 30, 2025
