Number of Companies Awaiting Licences From China For Importing Rare-Earth Magnets Double in Two Weeks

In FY 25, India imported around $200 million worth of rare-earth magnets. A majority of these imports were used in automotive and industrial applications.

The Wire Staff

In FY 25, India imported around $200 million worth of rare-earth magnets. A majority of these imports were used in automotive and industrial applications.

number of companies awaiting licences from china for importing rare earth magnets double in two weeks

Electric vehicle. Representative image. Photo: Michael Marais/Unsplash

New Delhi: In a matter of two weeks, the number of companies which are awaiting licences from China’s Commerce Ministry to procure rare-earth magnets has nearly doubled.

While the number of such companies was 11 earlier, it has now increased to 21, with new companies joining the list including Bosch India, Marelli Powertrain India, Mahle Electric Drives India, TVS Motor and Uno Minda, reported The Economic Times.

“These companies have duly filled in and got endorsed the end-user certificate and shipped the requisite documents to their suppliers for procuring rare earth magnets from China, but licences are yet to be awarded by the government there,” a senior industry executive told ET.

On April 4, China had issued orders mandating exporters that ship medium and heavy rare earth magnets to seek a licence from its commerce department after getting an end-user certificate from the buyer.

The certificate requires buyers to make certain guarantees including the guarantee that these items will not be used for storing, manufacturing, producing or processing weapons of mass destruction and their delivery systems.

According to data from the Society of Indian Automobile Manufacturers, 52 companies based in India source magnets from China to supply to automobile manufacturers across India.

At present, stakeholders in the electric vehicle (EV) industry are concerned about the fact that inventories of rare-earth magnets used in EV traction motors and power steering systems could run dry by mid-July this year. Rating agency Icra has said that in wake of the depleting inventory, there is a need for urgent contingency planning.

In FY 25, India imported around $200 million worth of rare-earth magnets. A majority of these imports were used in automotive and industrial applications.

In electric two-wheelers, motors cost between Rs. 8,000 and Rs. 15,000, with rare earth magnets accounting for around 30 per cent of the motor cost.

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