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China eases restrictions, grants licences to Indian firms to import rare earth magnets
Rare earth minerals are vital for India’s manufacturing ambitions in hi-tech areas such as electric vehicles and batteries.
NEW DELHI: China has granted licences to an unspecified number of Indian firms to import rare earth magnets, the external affairs ministry said on Thursday against the backdrop of production of electric vehicles being hit by Beijing’s recent restrictions on exports of the key components.
China’s move to ease restrictions on the supply of critical minerals came weeks after India raised the issue with the top Chinese leadership amid efforts by the two countries to normalise their relations following the more than four-year military standoff along the Line of Actual Control (LAC).
“Yes, we confirm that some Indian companies have received licences for importing rare earth magnets from China,” external affairs ministry spokesperson Randhir Jaiswal told a weekly media briefing in response to a question on whether four Indian firms had been permitted by the Chinese government to import rare earths.
“As far as the question of the latest talks and relaxations that have happened between US and China [and] as to how it is going to play into our domain, I will come back to you,” Jaiswal said when he was asked whether an understanding between the US and China this week will also benefit India.
“We have yet to look at it. I am not aware of the technicalities, but we will come back to you. But I do confirm that Indian companies have received licences for importing rare earths from China,” he said.
Rare earth minerals are vital for India’s manufacturing ambitions in hi-tech areas such as electric vehicles and batteries. China has dominated global supply chains for these critical minerals.
China controls around 70% of global rare earth mining, making it a dominant player in global supply chains. India was among the countries affected by China’s move to restrict the exports of rare earths.
China’s move to grant licences to Indian companies is being seen as part of its overall efforts to rebuild ties with India after the standoff on the LAC, which took relations to their lowest point in six decades.
The two sides reached an understanding to end the face-off on the LAC on October 21, 2024, and this was followed two days later by a meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping, who agreed to revive several mechanisms to normalise bilateral relations.
