Amid Trump-Xi talks, India gives update on rare earths licences for imports from China

The MEA statement came on a day US President Donald Trump met his Chinese counterpart Xi Jinping in South Korea. The two leaders signed a deal, keeping exports of rare earth minerals flowing to the world as part of a one-year agreement.

The Indian Express earlier reported that as many as four Indian companies, including DE Diamond, Hitachi and Continental India, were learnt to have gained permits to import Chinese rare magnets.

Why are these China import permits important

These are the first set of clearances since Beijing imposed tight controls on the export of these magnets in April. The clearances have been earned by the Indian wings of some of these companies that provide equipment to the country’s automotive sector and are learnt to be subject to export controls and several other conditions. The permissions are conditional and not for all applications, industry sources had indicated.

The latest restrictions on import of rare earth magnets and related materials from China began on April 4, affecting automakers globally, including vehicle manufacturers in India. EV makers in India are especially impacted and are on the verge of a potential shortage of the critical components, which raises concerns about price surge and production delays in the auto market.

China’s ban on seven heavy rare earth metals, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, as well as rare earth magnets, was imposed following the US administration’s reciprocal tariff. Before that, months ago, Beijing had banned exports to the US of gallium, germanium, antimony, and other key high-tech materials with potential military applications.

What are rare earth magnets used for?

Rare earth magnets, especially neodymium-iron-boron (NdFeB) magnets, are crucial for EV manufacturing, particularly in electric motors. They provide the strong magnetic fields needed for efficient and powerful electric motors, including traction motors that drive EVs. These magnets also play a major role in other EV components like power steering systems, wiper motors, and braking systems. China has a stranglehold over these rare earth magnets.

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