Indian authorities are initiating diplomatic engagement with Beijing to resolve delays in the import of rare earth magnets from China, which are critical to the country's auto, electronics, and clean energy sectors. According to The Economic Times, the supply disruption has triggered concerns across industries, particularly among electric vehicle (EV) and gear system manufacturers.

Despite the Chinese embassy in India endorsing import applications for nine Indian auto component firms—including Continental Automotive, Hitachi Astemo, and Mahle Electric Drives—final clearance from China’s commerce ministry has not been granted. No shipments have been released in the past two months, raising the risk of production halts.

Rare earth magnets, though representing a small proportion of total import value, are indispensable in drive trains, electric circuits, and motor systems. “Even if one such component is missing, production stops entirely,” an industry executive told The Economic Times.

India imported 870 tonnes of rare earth magnets worth approximately Rs 3.06 billion in FY25. The Society of Indian Automobile Manufacturers (SIAM) recently warned the government that inventory levels are critically low and disruptions to vehicle production could begin within weeks.

The impact extends beyond the auto industry. “It affects everyone—automotive, aerospace, electronics, clean energy. Anything involving electric circuits is at risk,” said another executive.

These supply issues stem from export restrictions announced by China on 4 April, reportedly for national security reasons. The controls follow global trade tensions and have impacted firms not only in India but also in the US, Germany, and Japan.

Out of 17 Indian companies that applied for import clearances, eight—including Minda Instruments, Nippon Audiotronix, and HMC MM Auto—are still awaiting End User Certificate (EUC) approvals from the Chinese embassy, further aggravating the supply chain crisis.