Team siliconindia

• China starts clearing rare earth magnet export licenses, allowing shipments to India after a long approval freeze
• Indian automakers and EV suppliers get partial relief, helping ease pressure on production schedules
• Approvals follow months of supply disruptions, which had impacted vehicle manufacturing and the EV supply chain

China has begun issuing export licenses for rare earth magnets (REMs) to Indian companies, offering relief to automakers and electric vehicle (EV) manufacturers that faced supply disruptions for months due to trade restrictions.

According to government officials, China’s Ministry of Commerce has started processing and approving applications submitted by Indian firms and Indian units of global auto component makers. Companies that have either received approvals or are in the clearance process include Jay Ushin, Indian arms of Continental AG, and suppliers to Mahindra & Mahindra, Maruti Suzuki, and Honda Scooters and Motorcycles.

Officials said the process has started slowly but is now moving forward. Some companies have already secured the required licenses, easing concerns over production delays. China dominates global production of rare earth magnets, making Indian manufacturers highly dependent on these imports.

REMs are a critical input for several industries, including automobiles, EVs, electronics, medical equipment, and defense. China imposed export licensing requirements on these materials in April as part of its response to higher tariffs imposed by the United States. The restrictions affected multiple countries, including India.

Under the new system, Chinese exporters can ship materials only after importers confirm that the magnets will not be used for defense or dual-use applications. Industry sources say the approval process remains complex and time-consuming, though progress is visible.

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Indian automakers had earlier raised concerns with the government, warning that delayed approvals were disrupting vehicle production schedules, especially for EVs. Over the past six months, Indian authorities have engaged with their Chinese counterparts to resolve the issue.

During a visit to New Delhi in June, Chinese Foreign Minister Wang Yi assured External Affairs Minister S. Jaishankar that China would ease restrictions on rare earth exports. Officials now say that despite earlier disruptions, the industry has managed to adapt and keep production running.