The Ministry of Commerce and the Ministry of External Affairs (MEA) are actively engaged in discussions with their Chinese counterparts to address the impact of Beijing’s recent restrictions on rare earth metal exports and the government will ensure that import of the essential items to the best possible extent, Ministry of Commerce confirmed on Monday.
“At the diplomatic level, also MEA and from Department of Commerce also have spoken to the ambassador. MEA is engaged with the counterpart country, China, in this case. And both diplomatic as well as commercial discussions are going on. And we are making all the efforts to see that these essential items of imports can come to India,” said Sunil Barthwal, Commerce Secretary.
India’s automotive sector is likely to face mounting pressure due to the growing shortage of rare earth magnets, one of the major components for electric and hybrid vehicles, ratings agency CRISIL has warned.
China’s recent export curbs and persistent delays in shipments have already begun to affect supply chains, raising concerns over potential production slowdowns. The disruption threatens to weigh on the industry’s expansion plans, particularly as Indian manufacturers ramp up investments in EVs to align with long-term clean mobility targets. Without timely resolution, the shortage could become a drag on the sector’s growth momentum in the coming quarters.
“Since it is impacting the auto sector more, so we are engaged with both SIAM, which is the Automaker Association, and ACMA, which is the Auto Component Manufacturers. We are facilitating them to have discussions with their counterpart in China,” said Barthwal.
He also assured that the government will be cooperating with auto manufacturers in the best possible way. The Indian government has positioned itself as a “facilitator” in the initiative and over the next few weeks officials from concerned ministries will have meetings with the Chinese officials.
As a consequence of China’s tariff war with USA, Beijing has directed that exporters of medium and heavy rare earth magnets will have to obtain a license from China’s Ministry of Commerce. To secure this license, exporters need to first receive an end-user certificate from the buyer, with the assurance that the imported materials will not be used in the development, production or handling of weapons of mass destruction or their delivery systems. The policy introduces an additional layer of scrutiny and has raised concerns among import-dependent industries globally, including India’s automotive sector.
