India in talks with China on additional end-user conditions for rare earth imports

In April 2025, Beijing prescribed that to obtain a license for rare earth, Chinese exporters must first 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
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India is in talks with China on how best to execute its new rare earth sourcing rules, which require importers to furnish guarantees that they will not re-export to other countries like the US, sources said.

The Indian automotive industry, especially EV manufacturers, and the electronics sector have been hit hard by China’s restrictions on rare earth exports since April this year and are struggling to get supplies resumed.

“Even as Indian importers had finally come to grips with the restrictions imposed by China on rare earth minerals in April and the end-user certification process, newer restrictions have been imposed this month and now the additional criteria prohibiting re-exports has been met. The government is trying to understand from Beijing how the new criteria can be incorporated in the end-user certificates,” a source tracking the matter told businessline.

Conditions applied

In April 2025, Beijing prescribed that to obtain a license for rare earth, Chinese exporters must first 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. 

This month, China came up with additional requirements laying down that the materials will not be re-exported or diverted.

“The Indian industry does not have clarity yet on how to go about meeting the criteria of guaranteeing that there would be no re-export. The Indian embassy in Beijing is in touch with officials in China’s Commerce Ministry for guidance,” said the source.

China’s ongoing trade friction with the US – a major buyer of Chinese rare earth – is one of the reasons behind Beijing’s strict monitoring of exports as it does not want Washington to source from other countries.

The new rules not only expanded the list of rare earth minerals covered by the export curbs from seven to 12, it also created extra-territorial controls. Foreign companies producing items with China-sourced rare earths or magnets will now also need a Chinese export license. This applies even if no Chinese companies are involved in the transaction, the official explained.

India has no option but to meet all given conditions, as in the short run it is majorly dependent on China for its rare earth sourcing, the official said. “It is absolutely important for India to build a domestic rare earth industry. But it can deliver only in the long term. In the short run, our industry, especially EV makers, are in desperate need of the material, and we must resume our imports from China,” the source said.

Moreover, China’s recent export restrictions on rare earth processing equipment was also likely to serve as a major impediment in India’s domestic efforts to build its rare earth industry, the source added.

Published on October 28, 2025