India Engages China Amid Rare Earth Magnet Import Stalemate Threatening Industries

India seeks China’s cooperation to resolve rare earth magnet import delays

India has initiated diplomatic engagement with China to address a critical disruption in the import of rare earth magnets, a key component in electric vehicles, gear systems and various electronic products. The delay in shipments has raised concerns across multiple sectors, including automotive, aerospace, clean energy and electronics.

The issue centers on the lack of approvals from China’s Ministry of Commerce, which has stalled shipments for over two months. This comes despite the Chinese embassy in India endorsing import applications for nine Indian component manufacturers such as Continental Automotive, Mahle Electric Drives and Hitachi Astemo.

The Society of Indian Automobile Manufacturers (SIAM) recently alerted the Indian government about dwindling inventories and potential manufacturing halts if the situation persists. Industry executives have emphasised that even though rare earth magnets account for a small portion of total production costs, their absence can halt entire assembly lines due to their role in crucial components.

India imported approximately 870 tonnes of rare earth magnets worth Rs. 306 crore in FY25. However, of the 17 firms that submitted applications for imports, eight—among them Minda Instruments, Nippon Audiotronix and HMC MM Auto—are still awaiting End User Certificate (EUC) clearance from Chinese authorities, further deepening supply chain uncertainties.

This trade tension arises in the context of broader Chinese export control measures implemented on April 4, which China attributes to national security concerns. These controls have affected multiple countries including the US, Germany and Japan, adding global weight to the standoff.

While India looks to resolve the matter through diplomatic channels, industries reliant on high-tech components are preparing for possible disruptions should the deadlock continue.