Despite public assurances from Beijing, India’s electric vehicle (EV) and electronics sectors are still waiting for a crucial lifeline: the resumption of rare earth element and magnet exports from China. It’s a standoff that’s left Indian manufacturers scrambling, government officials frustrated, and the future of the country’s ambitious EV rollout hanging in the balance.
Three weeks ago, Chinese Foreign Minister Wang Yi met with Indian External Affairs Minister S Jaishankar in late August 2025, promising to address the export curbs that had left Indian importers in the lurch. Yet, as of September 11, 2025, the promised shipments have not materialized. According to The Hindu BusinessLine and Business Standard, no Indian importer—including major EV producers—has received fresh shipments or even expedited application processing from Beijing.
This isn’t just a minor supply hiccup. China controls nearly 90% of global rare earth supplies, and these materials are essential for manufacturing EVs, cell phones, speakers, headphones, and even critical medical and defense equipment. Since April 4, 2025, China has imposed strict export licensing on these minerals, a move widely seen as retaliation for increased U.S. tariffs on Chinese goods. Under the new rules, Chinese sellers must secure export clearance, provided that imports can guarantee the materials won’t be used for dual-use or defense-related applications—a process described by industry insiders as complicated and painfully slow.
"We have not received any fresh shipments of rare-earth magnets from China ever since our vendors submitted applications," a leading two-wheeler original equipment manufacturer (OEM) told Business Standard. The sentiment is echoed across India’s EV and electronics manufacturing landscape, where the supply crunch is starting to bite hard.
It’s not for lack of trying. The Indian government, aware of the strategic vulnerability posed by China’s dominance in rare earths, has been working diplomatic channels vigorously. Since June, when the Indian automobile industry first raised alarms about the disruption to production schedules, officials have been in ongoing dialogue with their Chinese counterparts. But, as the clock ticks, the impasse drags on, leaving Indian factories at risk of idling lines and missing production targets.
The stakes are high. Rare earth elements are the backbone of modern technology, and the EV sector, in particular, is feeling the pinch. According to a 2025 report by Crisil, prolonged delays in obtaining these critical raw materials could slow down EV rollouts and disrupt auto production across the country. That, in turn, threatens to derail India’s plans to become a global player in electric mobility and could have a cascading effect on jobs and growth in key industries.
With no resolution in sight, Indian manufacturers are being forced to get creative—and fast. The Ministry of Mines has taken the unusual step of engaging both state-owned and private firms to source rare earth samples from mines controlled by Myanmar’s Kachin Independence Army (KIA). These samples are now being tested for heavy rare earths suitable for use in EV magnets and advanced equipment. It’s a risky and unconventional move, but one that underscores the urgency of the situation.
Meanwhile, companies on the ground are scrambling to adapt. Bajaj Auto, for instance, recently reported receiving cleared shipments of light rare-earth magnets after weeks of disruption, according to Reuters. It’s a rare bright spot in an otherwise bleak supply landscape. Other firms, like Mahindra & Mahindra, are racing to implement engineering workarounds and explore alternative technologies to manage the shortages, as reported by The Times of India.
But such stopgap measures can only go so far. Indian firms like Sterling are now developing rare-earth-free EV motors in a bid to reduce dependency on Chinese supplies. While this innovation is promising, experts warn that achieving full self-reliance will take years. In the meantime, the vulnerability remains—and so does the uncertainty.
According to The Hindu BusinessLine, the government is considering a fresh diplomatic push with China to resolve the impasse. The hope is that renewed dialogue might break the deadlock and restore a steady flow of rare earths, at least in the short term. But with the licensing process in China still bogged down by bureaucratic hurdles and geopolitical tensions, there are no guarantees.
For now, the consequences are already being felt. Without a swift resolution, India’s electronics exports could suffer, threatening not just the EV sector but a wide range of industries that rely on these critical materials. The specter of job losses and stunted growth looms large, adding a sense of urgency to every negotiation and workaround.
Industry voices are growing louder. In June 2025, the Indian automobile industry flagged concerns with the government, warning that delays in approval of imports from China’s Ministry of Commerce were causing significant disruptions. The message was clear: without access to rare earths, production schedules for everything from electric vehicles to consumer electronics would be thrown into chaos.
At the same time, the crisis is prompting a broader strategic rethink. India is pushing hard to diversify its rare-earth supply chains, not just through Myanmar but by exploring partnerships with other countries and investing in domestic research and development. The goal is clear: reduce reliance on a single, unpredictable supplier and build a more resilient ecosystem for critical raw materials.
This is easier said than done. Rare earth mining and processing are complex, environmentally challenging, and capital intensive. Even as Indian firms and policymakers chart a path toward self-reliance, the road ahead is likely to be long and fraught with obstacles.
All the while, the world watches. China’s dominance in rare earths has long been a strategic concern for countries far beyond India’s borders. The current impasse serves as a stark reminder of the risks inherent in concentrated supply chains—and the geopolitical leverage they can confer.
Ultimately, the outcome of India’s rare earth standoff with China will have implications that ripple far beyond the factory floor. It’s a test of resilience, innovation, and diplomatic skill—one that will shape the future of India’s EV industry and its broader ambitions in the global technology race. As the waiting game continues, manufacturers, workers, and policymakers alike are left hoping for a breakthrough that, for now, remains just out of reach.