After half a year of suspension of exports, China has finally resumed supply of heavy rare earth magnets to India. The announcement is a breath of fresh air for the Indian electric vehicle, renewable energy, and electronics industries that are facing production challenges due to the lack of such materials. It is a major move to let Indian companies buy rare earth metals from China, especially since China has been using rare earth minerals as a tool even now with United States side their trade tensions.
Four Indian companies were allowed to proceed
As per the sources close to the progress, the four Indian firms – Hitachi, Continental, Jay Ushin, and DE Diamonds – are given the green light to import rare earth magnets from China. Each of these companies has a different role in the Indian industrial eco-system. Hitachi and Continental are the two major contributors to the electric vehicle and electronics industries, in which the rare earth magnets are indispensable for the motors, sensors, and power systems. Jay Ushin is a supplier of automotive components that rely on precision magnets for power steering and braking mechanisms. DE Diamonds implements these materials in the production of advanced industrial tools and high-precision equipment.
China’s export compliance conditions
China had stopped magnet exports in April 2025 due to security concerns. The Commerce Ministry instructed the exporters to obtain licenses that are backed up by end-user certificates to verify that these materials are not used for the military or re-exported to third countries. Indian importers have now fulfilled those conditions, guaranteeing to Beijing that the magnets will be used for domestic industrial purposes only.
Signs of trade normalization between India and China
The consents came about during the improving trade relations between India and China. Direct flights between Kolkata and Guangzhou were launched again earlier this week, signaling a gradual restoration of normal business ties. Ministry of External Affairs spokesperson Randhir Jaiswal also confirmed the approvals and said that the move would assist in stabilizing supply chains for Indian manufacturers who have been struggling with material shortages in recent months.
Why are rare earth magnets so important for India?
Rare earth magnets are crucial for the existence of modern-day technology. These are the minerals that give power to electric vehicle motors, wind turbines, laptops, and smartphones, thus, making a huge breakthrough possible in the technology field. China is responsible for about 90 percent of global production, so, its decisions about exports are very influential on the global supply chain. When Beijing decided to introduce export controls earlier this year as a countermeasure to President Donald Trump’s trade tariffs, manufacturers all over the world were facing disrupted supply chains. This new permission for Indian companies can imply that there is some loosening of those limitations in the case of at least civilian and industrial applications.
India’s reliance on rare earth imports
India’s imports of rare earth magnets almost reached 870 tons in the FY25 period, and the value was estimated at approximately ₹306 crore. At the same time, internal production capacity is still very limited. Hence, the country is forced to take in foreign supplies to continue its march toward a green energy future and advanced manufacturing. Indian electric vehicle producers and renewable energy companies, among others, will probably be the biggest beneficiaries of this phased reopening of supplies in India.
Global context and US-China trade relations
Although China has restarted the supply to some areas, it is still imposing severe terms. The United States is still subject to a ban; however, President Donald Trump and Chinese President Xi Jinping have recently reached a one-year agreement regarding limited rare earth material supplies. While China is prepared to allow exports to India, it is keeping restrictions on the US, showing that its trade strategy is a cautious yet strategic one.
A move toward trade relations stable
When China’s decision to stop the ban on exports to Indian companies came, it marked the beginning of new trade relations dynamics in the region. This is a relief for India as it guarantees the supply of necessary materials for electromobility, renewable energy, and the manufacturing of electronics. The green lights to Hitachi, Continental, Jay Ushin, and DE Diamonds are not only the means to stabilize supply chains but also a gesture to the rest of the world that collaboration between the two Asian giants is feasible even in a highly sensitive environment of global trade.
