NEW DELHI: China has granted licences to an unspecified number of Indian firms to import rare earth magnets, the external affairs ministry confirmed on Thursday. This decision arrives against the backdrop of production disruptions in India’s electric vehicle sector, which had been hampered by Beijing’s recent limitations on the export of these critical components.
This easing of restrictions on critical minerals follows diplomatic engagements where India raised concerns with Chinese leadership. The move is seen as part of broader efforts to normalize bilateral relations, especially after a protracted military standoff along the Line of Actual Control (LAC) that had strained ties for over four years.
“Yes, we confirm that some Indian companies have received licences for importing rare earth magnets from China,” stated external affairs ministry spokesperson Randhir Jaiswal during a weekly media briefing. He was responding to inquiries about the Chinese government’s approval for Indian firms to import rare earths.
When asked about the potential impact of recent US-China discussions on India’s access to these minerals, Jaiswal mentioned, “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.” He added, “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.”
Rare earth minerals are indispensable for India’s ambitious manufacturing goals in advanced technological fields, including electric vehicles and batteries. China currently holds a dominant position in global supply chains for these essential minerals, controlling approximately 70% of the world’s rare earth mining operations.
India, among other nations, had previously felt the impact of China’s export restrictions. This recent decision to grant licenses is interpreted as a strategic move by China to mend and strengthen its relationship with India, following a period of significant tension stemming from the LAC standoff, which marked a six-decade low in bilateral relations.
The diplomatic thaw gained momentum after both nations reached an understanding to de-escalate the face-off on the LAC on October 21, 2024. Subsequently, Prime Minister Narendra Modi and Chinese President Xi Jinping held a meeting, agreeing to revitalize various mechanisms aimed at normalizing bilateral relations.