Are Indian firms finally getting access to rare-earth magnets from China?

The Ministry of External Affairs has confirmed that several Indian firms have been granted licences to import rare-earth magnets from China — a move crucial for EVs, defence, and tech manufacturing amid global supply chain tensions.

New Delhi: The Ministry of External Affairs (MEA) on Thursday confirmed that several Indian companies have received licences to import rare-earth magnets from China, a key step to support India’s rapidly expanding electric vehicle and technology manufacturing ecosystem.

According to media reports, among the companies that have secured permission are Jay Ushin Ltd, De Diamond Electric India Pvt. Ltd, and the Indian subsidiaries of Continental AG (Germany) and Hitachi Astemo (Japan).

Addressing a press conference, MEA spokesperson Randhir Jaiswal said, “Some Indian companies have received licences for importing rare-earth magnets from China. As for the question of how recent US-China trade developments could influence this, we will review and assess the implications.”

Why Rare-Earth Magnets Matter?

Rare-earth magnets, particularly neodymium-iron-boron (NdFeB), play a critical role in EV motors, wind turbines, consumer electronics, and defence systems. These high-performance magnets are essential for modern technologies due to their strength, efficiency, and lightweight nature.

China currently dominates the global rare-earth market, not only because it has abundant reserves but also due to its near-monopoly over the processing and refining technologies that turn these minerals into usable industrial components.

India, like several other nations, has been seeking to diversify supply sources to avoid overdependence on Chinese imports, but limited domestic refining capacity has made that transition challenging.

India will stop purchasing the Russian Oil; Trump claims PM Modi vowed to end Russian Oil Imports

What Makes Rare Earths ‘Rare’?

Rare earths are a set of 17 elements, scandium, yttrium, lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium.

Despite being relatively abundant in the Earth’s crust, these elements are called “rare” because they are dispersed in small concentrations and are difficult to extract and separate. The process involves complex, environmentally sensitive mining and refining steps, making it both costly and technically demanding.

Where Rare Earths Are Used?

The demand for rare-earth elements has skyrocketed with the rise of green energy and digital technologies. They are vital for producing EV batteries, smartphone components, computer chips, wind turbines, and precision-guided weapons.

In healthcare, rare earths are crucial for MRI machines and radiation therapy equipment. In the defence sector, they are used in radar, sonar, and missile guidance systems, underscoring their strategic importance.

India’s Next Steps: Building Supply Chain Resilience

Experts believe India’s decision to issue new import licences is a short-term measure to sustain industrial operations while the government continues efforts to develop local refining and magnet-making capacity.

The Department of Atomic Energy and the Ministry of Mines are reportedly exploring partnerships with countries like Australia and Japan to establish non-Chinese supply chains for rare earth materials. However, until such networks mature, imports from China will remain vital for India’s industrial and clean energy ambitions.