India has received limited relief in its electric vehicle and automotive supply chains, with the Government confirming that several domestic companies have been granted permits to import rare earth magnets from China, indicating an easing of supply chain bottlenecks from the world's main producer of these materials.

"Some Indian companies have received licences for importing rare earth magnets from China," said External Affairs Ministry spokesperson Randhir Jaiswal on 30th October, 2025.

According to media reports, import licences have been granted to Jay Ushin, De Diamond Electric India, and the Indian subsidiaries of German auto component manufacturer Continental AG and Japan's Hitachi Astemo.

China's export restrictions on rare earth magnets and related materials, introduced in April, have disrupted global automotive supply chains and caused concern among vehicle manufacturers.

The restrictions have affected India's electric vehicle sector, which depends on rare earth magnets for components such as motors and sensors, increasing the risk of production delays.

Electric two-wheeler manufacturers, including Bajaj Auto, TVS Motor, and Ather Energy, have reported production difficulties due to the shortage of heavy rare-earth magnets.

Company executives stated that, without these supply chain constraints, festival season sales figures would have been higher, reflecting the financial impact of the shortage.

Heavy rare-earth magnets are used in electric vehicle motors and digital systems due to their efficiency, compact size, and performance characteristics.

China produces about 60% of the world's rare earth elements and controls around 90% of global refining capacity.

India was the fifth-largest importer of rare earth permanent magnets and magnet alloys from China in 2024, with imports totalling approximately 2,850 tons.

Beijing's new export licensing regime was initially viewed as a response to US tariffs but has since had global effects.

The process of obtaining import approvals has become more complex, requiring end-use declarations confirming that the materials will not be used for military purposes.

Applicants must obtain certifications from multiple Indian ministries and the Chinese embassy, followed by export clearance from Chinese authorities.

Over 30 applications from Indian companies are awaiting approval. Firms must apply through their China-based suppliers, providing detailed end-use information and assurances that the materials will not be resold.

Currently, China is granting licences only for consumer and civilian applications, as rare earths also have military uses.