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Reeling under the shortage of rare earth magnets that threatens to stall the automobile industry, Indian auto industry representatives are awaiting a formal go-ahead from the Chinese commerce ministry before they leave for China to request for expediting the materials.

Industry sources say a delegation of almost 40-50 representatives had received visas last month, but have still not got a formal nod from the Chinese authorities to hold meetings on the matter. 

“They (Chinese authorities) have not given any appointment so far, so the delegation is yet to leave. Situation is bad as not even a single license has been issued to us so far,” said a source.

 

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After China put in place curbs on exports of rare earth materials in early April, the domestic automobile industry is staring at shortages and an imminent halt to production, leading to losses. 

China has mandated special export licenses for seven rare earth elements and related magnets, prompting the local auto industry to seek help from the Centre to request China to expedite approvals.

The revised framework demands detailed end-use disclosures and client declarations, including confirmation that the products will not be used in defense or re-exported to the US.

The critical materials, including samarium, gadolinium, terbium, dysprosium and lutetium, are essential in electric motors, braking systems, smartphones and missile technology. China controls over 90 per cent of the global processing capacity for magnets, used across sectors, including automobiles, home appliances and clean energy.

Rare earth magnets are integral to permanent magnet synchronous motors (PMSMs) used in EVs for high torque, energy efficiency and compact size.

Hybrids vehicles also depend on them for efficient propulsion. In internal combustion engine (ICE) vehicles, the use of rare earth magnets is largely limited to electric power steering and other motorised systems.

India, which sourced over 80 per cent of its 540 tonnes of magnet imports from China last fiscal, has started to feel the heat.

By May 2025, nearly 30 import requests from Indian companies were endorsed by the Indian government, but are yet to be approved by the Chinese authorities, and no shipments have arrived.