China Approves Bare Minimum Rare Earth Exports: India Left Waiting in Line
China Resumes Rare Earth Exports at Minimal Levels — India Not on Priority List
China Resumes Rare Earth Exports at Minimal Levels — India Not on Priority List
July 1, 2025 | Global Trade & Industry News
China has partially lifted its export restrictions on rare earth magnets, offering modest relief to global automakers, but keeping countries like India at the bottom of the priority list. The export revival—described by European industry officials as “bare minimum”—comes after a three-month chokehold on global magnet supply chains, initiated by China in retaliation to U.S. tariffs.
According to market sources, China’s rare earth magnet exports have dropped by 75% since April. While licensing has now resumed, approvals are being issued selectively. Europe has been granted just enough to avoid full-blown production halts. India, however, is reportedly not being prioritised, with shipments through third countries facing delays or rejection.
Ford, Volkswagen, Stellantis Feel the Pinch
Top automakers such as Ford and Volkswagen have acknowledged magnet shortages, though the situation is slowly stabilizing. Ford’s CEO, Jim Farley, confirmed that factories were recently shut down due to the lack of critical rare earth materials.
“Production lines might still see minor disruptions, but we’ve averted the worst for now,” said Nils Poel, Head of Market Affairs at CLEPA, the European automotive suppliers' association.
While European suppliers now receive about 60% of their licence requests, end-users in the United States and India are being processed much slower, or not at all.
What About India?
India’s vulnerability in the rare earths sector is becoming glaringly evident. The country imports over 80% of its rare earth materials from China, including neodymium, praseodymium, and dysprosium, all essential for electric vehicle motors and defense applications.
Despite possessing rare earth deposits in Odisha, Tamil Nadu, and Andhra Pradesh, India has no large-scale commercial refining or magnet-making capability. The lack of infrastructure and long-term planning has placed the country at the mercy of Chinese export decisions.
“If India doesn’t fast-track its rare earth roadmap, our electric mobility ambitions and clean energy goals will face serious delays,” warned an analyst from the Indian Strategic Minerals Forum.
U.S.-China Agreement: India Left Out?
In a surprise announcement last week, the White House confirmed an agreement with China to speed up rare earth approvals. Although specific terms were not made public, China stated the deal would be honored according to Chinese laws.
The catch? The agreement appears to prioritize U.S. and EU supply chains, with no mention of India. This has raised concerns among Indian policymakers and manufacturers who fear being squeezed out of critical material flows.
China's Export Strategy: Retaliation and Control
China’s move to weaponize rare earths is viewed as retaliation against escalating Western trade measures, including tariffs on Chinese EVs and batteries. Beijing now controls over 85% of the global rare earth refining market, making it a gatekeeper for key 21st-century technologies.
The new export licensing regime, introduced in April 2025, covers seven key rare earths and their magnetic alloys. Three months later, automakers and suppliers worldwide still face bureaucratic hurdles and uncertainty.
Final Thoughts: India Must Act Now
India’s exclusion from priority export flows is more than just a short-term trade issue—it’s a wake-up call. Without building domestic refining capacity, strategic reserves, and diversification partnerships (such as with Australia or Vietnam), India risks long-term setbacks in its manufacturing goals.
As the world shifts towards EVs, AI hardware, and green tech, the rare earths question is no longer just economic—it’s geopolitical.
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This is an AI-generated article created for informational and SEO purposes. While based on current events and data, readers should verify facts with official government or trusted news sources. This content is not intended to offer financial, political, or investment advice.
