China green flag up: 4 Indian cos can import rare earth magnets

New Delhi: China has resumed supplying heavy rare earth magnets to India after six months, providing relief to companies in the electric vehicle, renewable energy, and consumer electronics sectors.

Beijing has, however, imposed conditions - these magnets can't be re-exported to the US nor can they be used for military purposes, said people aware of the development. China and the US are embroiled in a trade war though both sides have agreed to take steps to partly ease tensions following US President Donald Trump's meeting with his Chinese counterpart Xi Jinping on Thursday.

Chinese exporters to four companies in India - Hitachi, Continental, Jay-Ushin and DE Diamonds - secured approvals from local authorities for supplying the rare earth magnets, the people said. ET was the first to report on October 9 that China has sought guarantees that these magnets will not be re-exported to the US. End-user Certificates Submitted
China had also sought assurance that magnets will be used only to meet local requirements.

Indian companies had already submitted end-user certificates (EUC) stating that the components will not be used for manufacturing weapons. However, more than 50 of these applications were pending approval from China’s Ministry of Commerce.

“There seems to be some easing in supplies. Four companies have got approvals for importing rare earth magnets,” a senior industry executive in the know told ET. The executive also noted that direct flights have also resumed between India and China, connecting the cities of Kolkata and Guangzhou, from earlier this week. Ministry of external affairs spokesperson Randhir Jaiswal Thursday also confirmed Indian companies getting licences from China for importing rare earth magnets. However, he added, “We have to look at how the US and China talks will play into our domain.”

In India, EV makers are the largest consumers of these powerful magnets. These magnets are also key to other high-tech industries such as renewable energy, electronics manufacturing, and aerospace and defence.

China controls 90% of the global production of these magnets. China on April 4 announced export controls on medium and heavy rare earth-related items with a view to “safeguarding national security”, in response to President Trump imposing tariffs on Beijing. The April notification mandated exporters that ship such items to seek a licence from China’s commerce department after getting an EUC from the buyer. The EUC requires buyers to guarantee these items will not be used for storing, manufacturing, producing, or processing weapons of mass destruction and their delivery systems. While China has over the past few months resumed supplies of rare earth magnets to companies in Europe and Southeast Asia, export licences were not issued to vendors supplying to India. India imported 870 tonnes of rare earth magnets valued at ₹306 crore in FY25. Earlier in the day, Trump announced that he and Chinese President Jinping have agreed on a one-year deal for the supply of crucial rare earth materials.