The External Affairs Ministry announced on Thursday that China has issued licenses to an undetermined number of Indian companies to import rare earth magnets. This comes as Beijing’s recent limitations on exporting the essential components have a negative impact on the production of electric vehicles.
As part of attempts to normalize relations between the two nations after the more than four-year military standoff along the Line of Actual Control (LAC), China moved to relax limits on the delivery of vital minerals weeks after India brought up the matter with the top Chinese leadership. When asked if four Indian companies had been given permission by the Chinese government to import rare earths, External Affairs Ministry spokesperson Randhir Jaiswal responded, “Yes, we confirm that some Indian companies have received licenses for importing rare earth magnets from China,” during a weekly media briefing.
When asked if an agreement between the US and China this week will also help India, Jaiswal responded, “As far as the question of the latest talks and relaxations that have happened between the US and China [and] as to how it is going to play into our domain, I will come back to you.”
“We haven’t looked at it yet. Although I am not familiar with the specifics, we will get back to you. However, I can attest that Indian businesses have been granted permission to import rare earths from China,” he stated. India’s industrial aspirations in high-tech sectors like electric vehicles and batteries depend on rare earth minerals. Global supply networks for these vital minerals have been dominated by China.
China is a major participant in global supply chains, controlling around 70% of the world’s rare earth mining. One of the nations impacted by China’s decision to limit rare earth exports was India. China’s decision to license Indian businesses is viewed as a component of its broader attempts to mend relations with India following the LAC impasse, which brought relations to their lowest point in 60 years.
After the two sides agreed to terminate the LAC standoff on October 21, 2024, Prime Minister Narendra Modi and Chinese President Xi Jinping met two days later and decided to resurrect a number of mechanisms to normalize bilateral relations.