A delegation of Indian automakers, along with Commerce Ministry officials, is likely to visit China over the next few weeks to expedite the issuance of licence for the Chinese exporters of rare earth magnets to India based on the duly filled ‘end-user certificate’ submitted to the authorities in China. Sources said members of the delegation are awaiting an appointment from the Chinese government, after which they will be able to meet their suppliers. “We will only go once we get the appointment dates from the Chinese government. Ministry of Commerce and Ministry of External Affairs are in talks with their Chinese counterparts, so we hope to get the visas and appointment soon. We were told it was a long weekend in China because of the Dragon Festival, so officials are expected to resume talks in a day or two,” a source told businessline. HD Kumaraswamy, Minister of Heavy Industries has also confirmed that a delegation will be going to China to resolve the issues on import of rare earth magnets. China controls over 90 per cent of the global processing capacity for the magnets, used across multiple sectors including automobiles, home appliances and clean energy. Criticial scene Export restrictions on rare earth metals from the Chinese threaten to disrupt production of electric vehicles as rare earth metal inventories are sufficient only for six to eight weeks. The situation is so serious that some Indian players are even considering setting up operations in China to manufacture sub-assemblies or completely knocked down (CKD) kits. “If imports continue to be restricted, manufacturers may be compelled to import sub-assemblies or CKD kits from China. Some Indian players might even consider setting up operations in China to manufacture these sub-assemblies/CKD kits, which runs counter to ‘Make in India’ and localisation and undermine the domestic value addition (DVA) required for PLI scheme,” said sources from the industry. The auto industry has also suggested India should take steps to build a domestic ecosystem for rare earth magnets, starting with magnet assembly, recycling of used magnets, and basic processing capabilities. “Support may be extended to Indian companies and start-ups to begin small-scale operations while larger ecosystem is developed,” said an industry source. Local mining The industry has suggested encouraging local mining and production of heavy rare earth (HRE) magnets for reducing dependence on China through incentives and till the time of local mining, ore and magnets production arrangements are done, government should arrange import from non-China based sources. For instance, import from other nations like Vietnam, Brazil and Russia. The auto industry conveyed to the government that though the import of rare earth magnets is miniscule in vehicles, the risk is vehicles cannot be manufactured even if OEMs are short of one component where a rare earth magnet is being used. Such a situation may lead to delay in future launches of cars, especially the new electric vehicles, the industry sources added. Published on June 2, 2025