Highlights
- China is restricting rare earth magnet exports to India.
- Strict end-user certificates are now required for these exports.
- These restrictions threaten EV manufacturing timelines in India.
- India’s EV ecosystem is vulnerable due to 70-90% global dependency on China’s rare earth magnets.
- India lacks domestic production capabilities for rare earth magnets.
- The export restrictions are part of a broader geopolitical strategy to weaponize strategic material supply chains.
- This strategy aims to exert economic pressure on other countries.
India’s electric vehicle (EV) sector is entering a state of quiet crisis. As of May 2025, some of the country’s top EV manufacturers have urgently appealed to the central government and key ministries for intervention after China tightened its grip on the export of critical rare earth magnets, particularly neodymium-iron-boron (NdFeB) types essential for electric motors. These magnets, which underpin India’s burgeoning green mobility push, may soon become a serious bottleneck.
Rare Earth Exchanges has reported, and in India, this was chronicled by The Hindu Business Line, (opens in a new tab) that China is now enforcing strict new export rules that require end-user certificates in a prescribed format. These must be verified by the Indian Ministry of External Affairs (MEA) and endorsed by the Chinese Embassy in India. The documents must explicitly guarantee that the magnets will not be used in military applications or re-exported. Until such compliance is met, export licenses are being withheld, and magnet shipments frozen.
Strategic Material, Strategic Control
The issue’s core lies in the strategic value of NdFeB magnets, which provide the high torque and energy efficiency needed for traction motors in electric two-wheelers, cars, and commercial vehicles. Without them, EV powertrains stall—literally and figuratively. China, which controls between 70% and 90% of global rare earth magnet production, is once again leveraging its dominance in a geopolitical chess match.
The new certificate requirement is being interpreted by insiders as part of Beijing’s broader effort to prevent these materials from being repurposed for defense manufacturing, especially by rival nations or through indirect transfers. However, the policy is already rippling in the civilian sector. In India, automakers fear project delays, cost escalation, and even production halts if magnet supplies are not reinstated swiftly.
Indian Automakers Raise Alarm
After a recent review meeting, at least two of India’s top three car manufacturers have reportedly raised the issue directly with relevant ministries. Stakeholder engagement has so far been informal, with formal high-level meetings still pending. However, the situation has reached a point where major players, including Tata Motors and Mahindra & Mahindra, are being pressed to respond, according to the India-based online media.
According to sources close to the matter, the Society of Indian Automobile Manufacturers (opens in a new tab) (SIAM) has already proposed setting up a designated body to manage the verification of import documents and end-user certificates. Under the proposed mechanism, the MEA would authenticate notarized paperwork, while a single-point agency would coordinate with Chinese authorities to avoid shipment blockades. Without this, magnet inventories are projected to last only until the end of June.
When contacted, both SIAM and the Automotive Component Manufacturers Association (ACMA) declined to comment. Likewise, Tata Motors and Mahindra have yet to issue official statements.
Risks to India’s Green Mobility Push
The supply freeze strikes at a precarious moment for India’s EV ecosystem. Several central government schemes, including the Prime Minister’s flagship EV initiatives, rely on the timely rollout of advanced motor technologies, most of which depend on Chinese-imported magnets. Any disruptions in this flow could derail rollout timelines and undermine investor confidence in India’s transition to sustainable transport.
Analysts warn that continued supply disruption could trigger a price surge in EVs due to the rising cost of motor components. Furthermore, domestic innovation and manufacturing capacity for NdFeB magnets remain negligible. India has no meaningful commercial-scale capability to produce these rare earth magnets domestically at present, nor a clear near-term strategy to do so.
Technology Transfer Blocked
Compounding the supply issue is China’s growing reluctance to transfer technology to Indian partners amid worsening geopolitical tensions and trade barriers. According to one government official, “projects are delayed as China is not transferring technology, amidst war and another rivalry.” The message is clear: China’s economic decoupling from perceived strategic competitors is no longer hypothetical. It is already happening and hitting India where it hurts most—in the industrial transition sectors that underpin future growth.
The Bigger Picture: Weaponization of Rare Earths
This is not an isolated act of trade policy. Rather, it is part of a larger trend of rare earth weaponization. In 2023, China imposed export restrictions on gallium and germanium, which are essential for semiconductors and defense systems. Now, with end-user certificate demands on magnets, the playbook is expanding. China is not only securing its dominance on rare earths, but it is also embedding political conditions into the supply chain. The message: If you want access to our strategic materials, play.
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