India Scrambles For Rare Earth Magnets As China Squeeze Threatens EV Growth

NEW DELHI (IANS) – India is working closely with electric vehicle (EV) manufacturers to secure a stable supply of rare earth magnets, as delays in Chinese export clearances threaten to disrupt the sector’s growth, a report by Crisil Ratings revealed on June 10.

Rare earth magnets, which are essential to electric motors but make up less than 5% of vehicle cost, are facing increased scrutiny from Chinese authorities. In April, China mandated export licenses for seven rare earth elements and finished magnets, requiring detailed end-use disclosures and assurances against defense use or re-export to the U.S. The approval process now takes over 45 days, creating a growing backlog.

India, which sourced more than 80% of its 540-tonne rare earth magnet imports from China last fiscal year, is already feeling the strain. By the end of May, nearly 30 import requests from Indian firms had been endorsed by the Indian government, but none have been cleared by Chinese authorities. No shipments have arrived so far.

While most automakers currently have 4–6 weeks of inventory, prolonged delays could start affecting production. EV models may face deferrals or rescheduling from July.

Rare earth magnets are vital for PMSMs due to their compact size, high torque, and energy efficiency. Hybrids also rely on them for propulsion.

Countries like Vietnam, Indonesia, Japan, Australia, and the U.S. are being explored as alternative sources for supply of the key ingredients.