A significant step has been taken regarding the rare-earth trade between India and China. Three Indian companies—Continentor India, Hitachi, and Jai Ushin—including Hitachi, have received permission to import rare-earth magnets from China. This license has been granted on the condition that these resources will not be used for export to the US or for defense purposes.
Rare-earth trade: Giving a new direction to the rare-earth trade between India and China, the central government has approved three Indian companies to import rare-earth magnets from China. According to media reports, Continentor India, Hitachi, and Jai Ushin have been issued this license with certain conditions. The conditions explicitly state that the imported resources will not be used for export to the US or for defense purposes. This decision comes at a time when China has imposed strict restrictions on the export of rare-earth magnets starting April 2025, which has impacted the global supply chain.
Approval with Conditions
According to sources, these companies have been granted this license on the condition that rare-earth resources imported from China will not be exported to the US. Furthermore, they cannot be used for any kind of defense equipment or military purposes. These restrictions are directly related to the ongoing geopolitical tensions between China and the US. China recently changed its rare-earth export rules, bringing this sector back into the global spotlight.
China's Dominance Continues
Rare-earth materials, or rare minerals, are considered the backbone of modern technology. They are used in electric vehicles, smartphones, wind turbines, solar panels, and defense equipment. China is the biggest player in this sector, controlling nearly 80 percent of the world's rare-earth production and processing.
From April 2025, China has implemented strict rules on the export of rare-earth magnets, impacting the global supply chain. China states that these minerals should only be used for civilian purposes. However, many countries view this as a strategy of economic pressure.
Impact on India and Growing Dependence
According to a report by the Society of Indian Automobile Manufacturers (SIAM), approximately 52 Indian companies import rare-earth magnets from China. In fiscal year 2024-25, India spent approximately 306 crore rupees on importing 870 tons of rare-earth magnets. Due to the rapidly increasing use in electric vehicles and hybrid technology, India's dependence on these minerals is continuously growing.
The government believes that allowing limited imports for these companies will provide relief to domestic industries. However, India's goal is to become self-reliant in the production of rare-earth minerals in the coming years.
India Possesses Large Reserves
India holds approximately 6 percent of the world's rare-earth mineral reserves. Large deposits are found in states like Kerala, Tamil Nadu, Odisha, Andhra Pradesh, and Gujarat. A report by the Geological Survey of India (GSI) indicates that the quality of rare-earth elements present in these states is high.
However, India's current production is less than 1 percent globally. Experts believe that if mining and refining of these resources are expedited, India could become a significant supplier in the global market within the next few years.
Steps Towards Reducing Dependence on China
The Indian government is now emphasizing the promotion of private and foreign investment in the rare-earth mining and processing sector. Concurrently, efforts are underway to develop alternative supply chains in collaboration with countries like Japan and Australia.
