Beijing seeks assurance from India on no US re-export of heavy rare earths

China has reportedly asked India to give a written assurance that heavy rare earth magnets imported from its firms will not be re-exported to the US and will be used only for domestic needs

China has demanded fresh guarantees from India before resuming shipments of heavy rare earth magnets, vital components for electric vehicles, renewable energy systems and defence technologies, according to a report by The Economic Times. The move comes amid Beijing’s push to tighten control over its rare earth exports and ensure that materials supplied to India are not re-exported to the United States.

 

The news report said that China wants India to provide written assurances that the heavy rare earth magnets imported from Chinese companies will be used solely for domestic purposes. Beijing is seeking export control commitments similar to those under the Wassenaar Arrangement, which governs the export of dual-use technologies and goods among its 42 member countries.

 

 

Although India is a signatory to the Wassenaar pact, China is not. However, Beijing reportedly wants India to follow similar end-use certification rules before any shipments can resume. Indian firms have already submitted end-user certificates (EUCs) confirming that the magnets will not be used in the production of weapons of mass destruction, the news report said.

 

The news report quoted an official as saying that New Delhi has not yet accepted Beijing’s demand for export control guarantees.

 

China produces nearly 90 per cent of the world’s heavy rare earth magnets and dominates global processing capacity. In recent years, Beijing has reduced transparency by withholding country-specific export data, increasing its leverage in trade negotiations, especially with the United States.   

Impact on India’s EV, manufacturing sectors

 

The shortage of heavy rare earth magnets has significantly affected Indian industries, particularly electric vehicle (EV) manufacturers. These magnets are crucial for producing motors in electric cars, buses, and trucks, as well as for renewable energy, electronics, aerospace and defence applications.

 

While China resumed supplies of light rare earth magnets to India after the Shanghai Cooperation Organisation (SCO) Summit in September, shipments of heavy magnets remain stalled. Industry executives said the delay has disrupted the production of larger electric vehicles, the news report said.

China expands rare earth export controls

 

China’s Ministry of Commerce recently expanded its export controls on rare earth materials and technologies, a move aimed at protecting what it calls “national security”. The updated rules restrict the export of processing technologies, prohibit unauthorised cooperation between Chinese and foreign firms, and require licences for equipment used in recycling rare earths, news agency Reuters reported.

 

The ministry has clarified that overseas defence users will not be granted export licences, while applications tied to semiconductor manufacturing will be reviewed case by case.

 

Beijing’s April notification had already required exporters to obtain licences and EUCs from buyers before shipping medium and heavy rare earth items. Since then, shipments to Europe and Southeast Asia have resumed but export licences to Indian suppliers remain pending.   

India’s dependence and the road ahead

 

In FY25, India imported 870 tonnes of rare earth magnets worth about ₹306 crore. The ongoing delay in supplies could hamper the country’s ambitions in electric mobility and high-tech manufacturing, The Economic Times reported.