China has issued licenses to an undisclosed number of Indian companies for the importation of rare earth magnets, as stated by the external affairs ministry on Thursday, in light of the impact on electric vehicle production due to Beijing’s recent export restrictions on these essential components.
The decision by China to relax restrictions on the supply of vital minerals occurred weeks after India brought the matter to the attention of senior Chinese officials, amidst ongoing efforts by both nations to restore their relationship following a military standoff that lasted over four years along the Line of Actual Control (LAC).
“Yes, we can confirm that several Indian firms have been granted licenses to import rare earth magnets from China,” said Randhir Jaiswal, spokesperson for the external affairs ministry, during a weekly media briefing when asked if four Indian companies had received permission from the Chinese government to import rare earth materials.
“Regarding the recent discussions and relaxations that have taken place between the US and China, and how this may influence our situation, I will provide further information later,” Jaiswal responded when questioned about whether an agreement between the US and China this week would also be advantageous for India.
“We have not yet examined it. I lack knowledge of the technical details, but we will revert to you. However, I can confirm that Indian companies have obtained licenses for the importation of rare earths from China,” he stated.
Rare earth minerals are essential for India’s manufacturing goals in advanced sectors such as electric vehicles and batteries. China has been the dominant force in global supply chains for these crucial minerals.
China holds approximately 70% of the global rare earth mining market, establishing itself as a key player in international supply chains. India was one of the nations impacted by China’s decision to limit the export of rare earths.
China’s decision to issue licenses to Indian companies is perceived as part of its broader strategy to mend relations with India following the standoff at the LAC, which had brought bilateral relations to their lowest level in sixty years.
The two nations reached an agreement to conclude the standoff at the LAC on October 21, 2024, which was subsequently followed by a meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping two days later, where they consented to reinstate several mechanisms aimed at normalizing bilateral relations.
