China restricts rare earth exports to India

China, the dominant exporter of rare earth magnets, imposed export restrictions on seven rare earth elements and finished magnets in April 2025, requiring detailed end-use disclosures and client declarations. This has led to significant delays in shipment clearances, tightening global supply chains. India, which imports over 80% of its rare earth magnets from China, has been particularly affected, with nearly 30 import requests from Indian companies endorsed by the Indian government but not yet approved by Chinese authorities. This supply squeeze poses a significant risk to India's automotive sector, especially for electric vehicle (EV) launches and production, as rare earth magnets are critical components in PMSMs used in EVs. S&P Global — CRISIL Ratings highlighted that prolonged delays could impact vehicle production from July 2025. In response, India is engaging with China to ensure supply predictability, building strategic inventories, exploring alternative suppliers like Vietnam, Indonesia, Japan, Australia, and the United States, and accelerating domestic exploration and production under Production Linked Incentive schemes. India also expressed interest in joint exploration of rare earth and critical minerals with Central Asian countries.