Highlights

• India granted its first-ever import licenses for rare earth magnets from China to:
  • Continental India
  • Hitachi
  • Jay Ushin
• Strict prohibitions against re-export to:
  • US
  • Defense applications
• The move addresses short-term supply bottlenecks for India's EV and electronics manufacturers.
• India highlights continued dependence on China's 90% global monopoly in magnet production.
• India has the world's third-largest rare earth reserves.
• India lacks domestic refining and sintering capacity.
• True supply chain independence is still years away for India.

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In a development that quietly reshapes Asia’s magnet supply chain, India has reportedly granted its first-ever licenses to three firms—Continental India, Hitachi, and Jay Ushin—to import rare earth magnets from China. The move, confirmed by CNBC-TV18, is no small gesture: these magnets power electric vehicles, smartphones, and wind turbines. But the approvals come with a geopolitical twist—restrictions prohibit re-export to the United States or use in defense-related applications.

This clause, reported in the Indian press, including the Financial Express (opens in a new tab), speaks volumes. India’s government is walking a tightrope between industrial necessity and strategic caution, seeking to unblock supply bottlenecks for its domestic manufacturing base without becoming a conduit for U.S.-China technology rivalry.

Between Dependency and Decoupling

Importantly, India’s rare earth predicament is emblematic of a global dilemma: how to scale high-tech industries without relying on China’s near-monopoly in magnet production, estimated at 90% of global output. The new import licenses might ease short-term supply constraints for automotive and electronics manufacturers—including Maruti Suzuki’s component chain—but they underscore a deeper dependence that New Delhi has struggled to escape.

Although India possesses the world’s third-largest REE reserves, the absence of domestic refining and sintering capacity keeps its ambitions grounded, according to Rare Earth Exchanges (REEx) review. The specialized machinery needed for magnet production still originates largely in China—a reality that undercuts India’s “Make in India” narrative for strategic materials.

What’s Real—and What’s Wishful

The facts appear straightforward: China’s tightened export rules and India’s controlled import approvals are both real. The speculation lies in the idea that these licenses mark a turning point toward self-sufficiency. Without domestic refining, magnetization, or alloying infrastructure, India remains years away from independence in the permanent magnet supply chain.

Still, this policy move is not without meaning. It signals that India is experimenting with a hybrid strategy—open enough to keep factories running, cautious enough to preserve geopolitical balance. Investors should interpret this as pragmatic realism rather than a policy breakthrough.

Why This Matters for the Supply Chain

For rare earth investors and strategists, suggest REEx,  India’s calibrated magnet imports highlight the new normal: fragmentation, not globalization. Each nation is fencing its critical materials, imposing invisible tariffs through politics and policy. India’s step may look modest, but it reflects a larger reordering of industrial geography in the age of resource nationalism.

Source: Financial Express / CNBC-TV18, October 30, 2025

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