<p>The Chinese government has put restrictions, with effect from April 4, mandating <a href="https://www.deccanherald.com/business/auto-industry-seeks-govt-help-in-expediting-approvals-for-rare-earth-magnets-import-from-china-3576422">special export licenses</a> for seven rare earth elements and related magnets.</p><p>China controls over 90 per cent of global processing capacity for the magnets, used in fields as varied as automobiles, home appliances and clean energy. It enacted measures in April requiring companies to obtain <a href="https://www.deccanherald.com/business/companies/indias-maruti-says-no-immediate-impact-from-china-rare-earth-magnet-curbs-3567563">import permits</a>.</p><p>Japanese automaker Maruti Suzuki had said on June 2 that there was no immediate production impact from China's export curbs on rare earth magnets, a key component, and that it was in talks with the government on the matter.</p><p>Maruti is planning to launch its first EV in India this year - an electric SUV called the e Vitara.</p><p>On June 8, the automobile industry sought government support in expediting approvals from the Chinese government for importing rare earth magnets used in various applications, including passenger cars.</p><p>As per the industry sources, various domestic suppliers have already sought approval from the Chinese government through their local vendors in China.</p><p>Suzuki Motor has already suspended production of its Swift car because of China's curbs.</p><p>The critical materials include, samarium, gadolinium, terbium, dysprosium and lutetium, which are essential in electric motors, braking systems, smartphones and missile technology.</p>.<p>Rare earth magnets are strong and permanent kind of magnets which are made up of alloys from rare earth elements.</p><p>Considered important they are used for a variety of purposes like making electronics, electric vehicles, medical devices, etc.</p><p>Rare earth magnets have high magnetic energy storage capacity with low coercivity at high operating temperatures. </p><p>Rare earth magnets are integral to Permanent Magnet Synchronous Motors (PMSMs) used in EVs for their high torque, energy efficiency and compact size.</p><p>Hybrids 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. </p>.<p>A disruption in rare earth magnet supplies lasting beyond a month can impact production of passenger vehicles, including electric models, weighing on the domestic automobile industry's growth momentum, a report on June 10 said.</p><p>Rare earth magnets, low in cost but critical in function, could emerge as a key supply-side risk for <a href="https://www.deccanherald.com/business/economy/disruption-of-rare-earth-magnet-supplies-beyond-30-days-can-impact-vehicle-production-report-3578963">India's automotive sector</a> if China's export restrictions and delays in shipment clearances persist.</p><p>Crisil Ratings Director Poonam Upadhyay added that automakers are actively engaging with alternative suppliers in countries such as Vietnam, Indonesia, Japan, Australia, and the US, while also optimising existing inventories.</p><p>With the special export licenses and its clearance process taking at least 45 days, this added scrutiny of China has significantly delayed approvals. And the growing backlog has further slowed clearances, tightening global supply chains.</p><p>India, which sourced over 80 per cent of its 540 tonnes magnet imports from China last fiscal, has started to feel the impact.</p><p>By end-May 2025, nearly 30 import requests from Indian companies were endorsed by the Indian government, but none have yet been approved by the Chinese authorities, and no shipments have arrived.</p><p>According to a <a href="https://www.livemint.com/industry/indias-rare-earth-magnets-crisis-what-s-next-for-the-ev-sector-11749616024940.html" rel="nofollow">report</a> by <em>Mint</em>, President and Director of JATO Dynamics India, Ravi Bhatia has predicted that the manufacturing delay could range between two and six months and a 5-8 per cent price hike.</p><p>Vikram Handa, MD at Epsilon Carbon Pvt Ltd said, "It takes about 4-5 years to scale up the technology and qualify with auto OEMs. Thereafter, it takes about 2 years to build the plant."</p><p>"It takes a lot of capital during this time to scale up technology. Unfortunately, all the processing is done in China in order to reach the levels of purification needed,” Handa added.</p><p>Deloitte India Partner and Automotive Sector Leader Rajat Mahajan noted that the shortage is a major supply chain disruption especially for EVs as rare earth metals are used extensively in the electric motor which is a core component.</p><p>"This situation will hopefully get resolved via diplomatic channels, but if it continues then we may see a shift towards powertrains for large Original Equipment Manufacturers (OEMs)," he said.</p><p>Icra Senior Vice President & Co-Group Head Corporate Ratings Srikumar Krishnamurthy noted that rare earth magnets are used for multiple applications in EVs - electric motors, regenerative braking systems, power steering etc.</p><p>"The implications could include inflationary pressures (led by higher cost for rare earth magnets against the backdrop of shortage) or even disruption in production schedules in absence of a seamless supply of the same," Krishnamurthy stated.</p>.<p>Nitin Gupta, CEO and Co-Founder of Attero Recycling pointed out short-term solutions mentioning 'recycling'. </p><p>He said, "India’s domestic supply chain can be fastened very well through recycling. If you look at battery grade minerals, cobalt, lithium carbonate and nickel graphite, we are extracting more than 97 per cent pure battery grade cobalt, lithium, nickel and graphite and putting it back in the circular economy. Globally, extraction efficiency is less than 75 per cent, including China."</p><p>"We can make India the recycling hub of the world. We don’t need to restrict ourselves to end-of-life products produced in India. Focus on domestic recycling, build-up capacity to become the global recycling hub and in parallel, continue to develop mining activities so that in the long-term, we are only self-reliant but we can supply to the world," Gupta added.</p><p><em>(With PTI and Reuters inputs)</em></p>
<p>The Chinese government has put restrictions, with effect from April 4, mandating <a href="https://www.deccanherald.com/business/auto-industry-seeks-govt-help-in-expediting-approvals-for-rare-earth-magnets-import-from-china-3576422">special export licenses</a> for seven rare earth elements and related magnets.</p><p>China controls over 90 per cent of global processing capacity for the magnets, used in fields as varied as automobiles, home appliances and clean energy. It enacted measures in April requiring companies to obtain <a href="https://www.deccanherald.com/business/companies/indias-maruti-says-no-immediate-impact-from-china-rare-earth-magnet-curbs-3567563">import permits</a>.</p><p>Japanese automaker Maruti Suzuki had said on June 2 that there was no immediate production impact from China's export curbs on rare earth magnets, a key component, and that it was in talks with the government on the matter.</p><p>Maruti is planning to launch its first EV in India this year - an electric SUV called the e Vitara.</p><p>On June 8, the automobile industry sought government support in expediting approvals from the Chinese government for importing rare earth magnets used in various applications, including passenger cars.</p><p>As per the industry sources, various domestic suppliers have already sought approval from the Chinese government through their local vendors in China.</p><p>Suzuki Motor has already suspended production of its Swift car because of China's curbs.</p><p>The critical materials include, samarium, gadolinium, terbium, dysprosium and lutetium, which are essential in electric motors, braking systems, smartphones and missile technology.</p>.<p>Rare earth magnets are strong and permanent kind of magnets which are made up of alloys from rare earth elements.</p><p>Considered important they are used for a variety of purposes like making electronics, electric vehicles, medical devices, etc.</p><p>Rare earth magnets have high magnetic energy storage capacity with low coercivity at high operating temperatures. </p><p>Rare earth magnets are integral to Permanent Magnet Synchronous Motors (PMSMs) used in EVs for their high torque, energy efficiency and compact size.</p><p>Hybrids 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. </p>.<p>A disruption in rare earth magnet supplies lasting beyond a month can impact production of passenger vehicles, including electric models, weighing on the domestic automobile industry's growth momentum, a report on June 10 said.</p><p>Rare earth magnets, low in cost but critical in function, could emerge as a key supply-side risk for <a href="https://www.deccanherald.com/business/economy/disruption-of-rare-earth-magnet-supplies-beyond-30-days-can-impact-vehicle-production-report-3578963">India's automotive sector</a> if China's export restrictions and delays in shipment clearances persist.</p><p>Crisil Ratings Director Poonam Upadhyay added that automakers are actively engaging with alternative suppliers in countries such as Vietnam, Indonesia, Japan, Australia, and the US, while also optimising existing inventories.</p><p>With the special export licenses and its clearance process taking at least 45 days, this added scrutiny of China has significantly delayed approvals. And the growing backlog has further slowed clearances, tightening global supply chains.</p><p>India, which sourced over 80 per cent of its 540 tonnes magnet imports from China last fiscal, has started to feel the impact.</p><p>By end-May 2025, nearly 30 import requests from Indian companies were endorsed by the Indian government, but none have yet been approved by the Chinese authorities, and no shipments have arrived.</p><p>According to a <a href="https://www.livemint.com/industry/indias-rare-earth-magnets-crisis-what-s-next-for-the-ev-sector-11749616024940.html" rel="nofollow">report</a> by <em>Mint</em>, President and Director of JATO Dynamics India, Ravi Bhatia has predicted that the manufacturing delay could range between two and six months and a 5-8 per cent price hike.</p><p>Vikram Handa, MD at Epsilon Carbon Pvt Ltd said, "It takes about 4-5 years to scale up the technology and qualify with auto OEMs. Thereafter, it takes about 2 years to build the plant."</p><p>"It takes a lot of capital during this time to scale up technology. Unfortunately, all the processing is done in China in order to reach the levels of purification needed,” Handa added.</p><p>Deloitte India Partner and Automotive Sector Leader Rajat Mahajan noted that the shortage is a major supply chain disruption especially for EVs as rare earth metals are used extensively in the electric motor which is a core component.</p><p>"This situation will hopefully get resolved via diplomatic channels, but if it continues then we may see a shift towards powertrains for large Original Equipment Manufacturers (OEMs)," he said.</p><p>Icra Senior Vice President & Co-Group Head Corporate Ratings Srikumar Krishnamurthy noted that rare earth magnets are used for multiple applications in EVs - electric motors, regenerative braking systems, power steering etc.</p><p>"The implications could include inflationary pressures (led by higher cost for rare earth magnets against the backdrop of shortage) or even disruption in production schedules in absence of a seamless supply of the same," Krishnamurthy stated.</p>.<p>Nitin Gupta, CEO and Co-Founder of Attero Recycling pointed out short-term solutions mentioning 'recycling'. </p><p>He said, "India’s domestic supply chain can be fastened very well through recycling. If you look at battery grade minerals, cobalt, lithium carbonate and nickel graphite, we are extracting more than 97 per cent pure battery grade cobalt, lithium, nickel and graphite and putting it back in the circular economy. Globally, extraction efficiency is less than 75 per cent, including China."</p><p>"We can make India the recycling hub of the world. We don’t need to restrict ourselves to end-of-life products produced in India. Focus on domestic recycling, build-up capacity to become the global recycling hub and in parallel, continue to develop mining activities so that in the long-term, we are only self-reliant but we can supply to the world," Gupta added.</p><p><em>(With PTI and Reuters inputs)</em></p>