New Delhi: China has approved import licences for certain Indian companies to purchase rare earth magnets, India’s Ministry of External Affairs (MEA) confirmed on Thursday, marking a notable step toward stabilising relations between the two countries after years of tension along the Line of Actual Control (LAC).
“Some Indian companies have received licences for importing rare earth magnets from China,” MEA spokesperson Randhir Jaiswal said during his weekly briefing, without providing further details.
The move comes as both nations work to normalise diplomatic and economic ties that were severely affected by the military standoff in eastern Ladakh, which began in May 2020. The confrontation led to a deadly clash in the Galwan Valley the following month and strained relations for more than four years. The disengagement process from the remaining friction points at Demchok and Depsang was completed in October last year, effectively ending the face-off.
Rare earth minerals are vital components in high-technology sectors such as electric vehicles (EVs), drones, and battery storage. China dominates the global supply chain, accounting for roughly 70 per cent of worldwide rare earth mining. India, which has been seeking to secure a steady supply of critical minerals to support its economic expansion, has long relied on imports to meet domestic demand.
The latest development follows China’s recent decision to tighten export controls on technologies and equipment related to rare earths, lithium batteries, and superhard materials. Despite these new restrictions, Beijing’s decision to issue import licences to Indian companies signals a willingness to re-engage economically.
Until 2023, China was also a major supplier of fertilisers to India but halted exports to several countries last year. Although Beijing lifted those curbs in June, India was not initially included in the relaxation. The new move on rare earths indicates a gradual reopening of trade channels.
Diplomatic efforts to mend ties have gained momentum over the past few months. These include the resumption of the Kailash Mansarovar Yatra and India’s decision to restart the issuance of tourist visas to Chinese nationals.
The decision to revive various dialogue mechanisms between the two sides was reached during a meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping in the Russian city of Kazan in October last year.