China has reportedly demanded fresh guarantees from India regarding the use of heavy rare earth magnets before resuming their export, triggering strategic and industrial concerns across India’s electric vehicle, renewable energy, and defence sectors. The move comes amid Beijing’s tightening grip over its rare earth supply chain and ongoing trade negotiations with the United States.
According to reports published on October 9, 2025, China has asked Indian companies to provide written assurances that the imported rare earth magnets will be used solely for domestic purposes and not re-exported to the US or used in manufacturing weapons of mass destruction. While some Indian firms have submitted end-user certificates (EUCs), Beijing is pushing for additional export control guarantees similar to those under the Wassenaar Arrangement—a multilateral pact that promotes transparency in dual-use technologies. India is a signatory to the arrangement, but China is not.
China’s Strategic Rare Earth Leverage
China controls nearly 90% of the global production of heavy rare earth magnets, which are critical components in electric motors, wind turbines, aerospace systems, and defence technologies. By demanding end-use assurances, Beijing is leveraging its dominance to influence regional trade flows and limit strategic material access to rival economies.
Rare Earth Export Dynamics: India-China Snapshot
| Category | China’s Share in Global Supply | India’s Import Dependency | Strategic Use Cases |
|---|---|---|---|
| Heavy Rare Earth Magnets | ~90% | High | EV motors, defence, aerospace |
| Light Rare Earth Magnets | ~70% | Moderate | Electronics, consumer goods |
| Processing Capacity | Dominant | Limited | Refining, separation |
| Export Control Status | Tightened since April 2025 | Seeking relaxation | Post-SCO summit |
Impact on Indian Industry
The shortage of heavy rare earth magnets has already disrupted production across India’s EV and high-tech manufacturing sectors. Industry executives report delays in assembling motors for electric three-wheelers, buses, and cars. Renewable energy firms are also facing procurement challenges for turbine components.
Sectoral Impact of Rare Earth Shortage in India
| Sector | Dependency Level | Impact Severity | Key Components Affected |
|---|---|---|---|
| Electric Vehicles | High | Severe | Permanent magnets, motors |
| Renewable Energy | Moderate | Moderate | Wind turbine magnets |
| Aerospace & Defence | High | Severe | Radar systems, propulsion |
| Electronics | Moderate | Mild | Speakers, sensors |
India’s Response and Strategic Options
While India has not yet accepted China’s demand for Wassenaar-style export controls, officials have acknowledged the need for end-use transparency. The commerce ministry is reportedly backing some EUCs submitted by Indian firms, but broader policy clarity is awaited.
India is also accelerating efforts to build domestic rare earth processing capacity and diversify sourcing from countries like Australia, Vietnam, and Brazil. President Droupadi Murmu recently emphasized the need for self-reliance in rare earth production during her address at the National Science Congress.
India’s Rare Earth Strategy Roadmap
| Initiative | Status (2025) | Target Outcome by 2030 |
|---|---|---|
| Domestic Mining Expansion | Under exploration | Reduce import dependency |
| Processing Infrastructure | Pilot plants active | Full-scale refining units |
| Strategic Partnerships | Talks with Australia, Brazil | Diversified sourcing |
| Policy Framework | Draft stage | Export control and incentives |
Geopolitical Undercurrents
Analysts believe China’s demand is part of a broader strategy to control rare earth flows amid its trade tensions with the US. By restricting access to strategic materials, Beijing aims to gain leverage in negotiations and prevent indirect supply to American defence and tech industries.
India, caught in the crossfire, must balance its industrial needs with diplomatic caution. Experts suggest that India should push for multilateral frameworks that ensure fair access to rare earths without compromising national security.
Disclaimer: This news content is based on verified reports, government statements, and industry data as of October 10, 2025. It is intended for editorial use and public awareness. The information does not constitute investment advice or diplomatic endorsement and adheres to ethical journalism standards.
