India Grants Import Licences for Rare Earth Magnets from China

• The Government of India has issued the first batch of import licences to four domestic firms, including the Indian arms of Hitachi and Continental India , allowing them to directly import rare earth (RE) magnets from China . The decision provides critical relief to the automotive and electric vehicle (EV) sectors , which have struggled since Beijing tightened export controls on these essential materials in April 2025 .

Breakthrough in Supply Chain Access

• This marks the first official clearance since China—responsible for nearly 90% of global RE magnet production —introduced stricter export procedures. The magnets, primarily neodymium-iron-boron (NdFeB) , are indispensable for EV motors, wind turbines, and high-performance electronics . India’s EV industry had faced potential production slowdowns and rising costs due to restricted access, making this approval a key step in stabilising supply chains.

Conditional Licences and Government Oversight

• The issued licences are conditional and come under strict regulatory supervision . Importing companies must ensure the magnets are used only for civilian and automotive applications , not for defence or dual-use purposes. Approvals were granted following clearance from the Director General of Foreign Trade (DGFT) and required official assurances to Chinese authorities . The Ministry of External Affairs (MEA) confirmed that the move was designed to protect industrial continuity while maintaining national security protocols.

Impact on India’s Automotive and EV Sector

• The authorisation prevents potential disruptions in EV production that could have resulted from supply shortages. Earlier, manufacturers were forced to consider importing complete motor assemblies instead of individual magnets—an option that would have increased costs and required redesigning vehicle systems. The new import licences allow automakers to maintain existing designs, ensuring production stability and cost efficiency in the short term.

Strategic Push for Self-Reliance

• While this decision offers immediate relief, India continues to pursue long-term self-reliance in rare earth processing and magnet manufacturing. The government is encouraging indigenous production through research partnerships and collaboration with allied nations such as Japan and Australia.

Exam-Oriented Facts

• Material: Neodymium-Iron-Boron (NdFeB) magnets

• Use: EV motors, wind turbines, electronics

• China’s Share: ~90% of global RE magnet production

• Regulator: DGFT (Director General of Foreign Trade)

• Condition: Civilian and automotive use only

• Goal: Ensure supply continuity, reduce dependency on China

The approval of import licences marks a strategic and stabilising move , balancing industrial demand and national security while paving the way for India’s long-term rare earth independence .