Beijing wants assurances from India that rare earth magnets won’t reach US

New Delhi: China has stepped up control over rare earth exports, seeking guarantees from India that heavy rare earth magnets supplied by Beijing will not be re-exported to the United States and will be used solely to meet domestic needs. The request comes as China expands restrictions on processing technologies and export licensing for critical materials used in defence, semiconductors, and advanced electronics.

According to The Economic Times, a person familiar with the matter said, “Our understanding is that China is looking at some deal with the US on heavy rare earth magnets and is unwilling to release supplies without a guarantee that there will not be any diversion.” Another source added that India has not agreed to such conditions so far.

China produces over 90 per cent of the world’s processed rare earths and magnets, which are derived from 17 elements vital for electric vehicles, aircraft engines, wind turbines, smartphones, and military radars. While China accounts for roughly 70 per cent of global rare earth mining, it controls 90 per cent of processing, giving it significant leverage over international supply chains.

The Chinese Commerce Ministry announced that export control measures would be imposed immediately on technologies related to rare earth mining, smelting, separation, magnetic material production, and recycling. The ministry cited concerns that some overseas organisations have been processing Chinese rare earths and using them in sensitive areas, posing “significant damage or potential threats to China’s national security and interests.” Humanitarian exports for emergency medical care or disaster relief will be exempt from licensing.

The renewed curbs come ahead of high-level trade discussions between China and the US on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum later this month. Rare earths have become a central issue in ongoing trade negotiations, having previously influenced the interim trade deal reached between US President Donald Trump and Beijing.

The restrictions also intersect with India-China trade relations, particularly affecting the automobile industry. While ties between the two countries improved after Prime Minister Narendra Modi met President Xi Jinping in Tianjin on August 31, China has maintained its rare earth export limitations, highlighting the strategic importance of these critical materials in global supply chains.