China processes over 90
China is not likely to alleviate limitations on export of unusual earth minerals and other automobile parts till the Indian federal government reciprocates by calling down curbs on the Chinese market under Press Note 3. This position was explained to electrical car(EV)producers at a conference in the Chinese embassy throughout the Diwali duration.
According to sources in the EV market, the Chinese embassy authorities were clear about reciprocity from India on enabling FDI from China if they anticipate alleviating of export controls on unusual earth aspects.
“Our market delegation went to the Chinese Embassy mainly to request for relaxation of import of magnets. The Chinese trade authorities who fulfilled us initially stated ‘you have actually currently fixed the problem with changing magnets and utilizing ferrite motor. Why are you asking for relaxations’,” a producer who went to the conference informed businessline
In the exact same breath, the Chinese trade authorities made it clear to them that unless some reciprocity is revealed towards their domestic market, which is dealing with financial investment difficulties in India since of constraints enforced through Press Note 3, the Indian market can not anticipate relief on the unusual earth magnet front.
“He (Chinese embassy authorities) plainly informed not to squander our time going to fulfill unusual earth magnet providers in China since that will not assist. He stated this is a concern that our federal government needs to deal with. He stated ‘ask your MEA (Ministry of External Affairs) and DPIIT (Department for Promotion of Industry and Internal Trade) to deal with the problems from their end,” the market source stated.
An inquiry sent out to Chinese embassy in New Delhi stayed unanswered till the time of press.
China processes over 90 percent of the world’s uncommon earth magnets, which are commonly utilized in parts like speedometers, electrical motors, e-axles, engine ignition coild etc. Because April 4, this year, the Chinese federal government has actually enforced limitations needing unique export licences for 7 unusual earth aspects and associated magnets. The car market has actually been attempting different ways, consisting of sees to China to satisfy their providers. So far, the concern stays unsolved.
The Indian importers were likewise needed to provide their Chinese providers an endeavor that the unusual earth magnets acquired from them would just be utilized in cars, and not for any defence or military applications. Such applications were likewise routed through several federal government departments in India, before being forwarded to the Chinese authorities, however even after such troublesome procedures, the limitations are still dominating.
The most recent conference with the Chinese authorities have actually dimmed the market’s hopes even further.
“Indicating Press Note 3, the Chinese authorities pointed out that a number of items of Chinese business have actually not been authorized in the last 5 years by the Bureau of Indian Standards (BIS). In such a scenario, we were informed it was not sensible for us to anticipate that a resolution of constraints on uncommon earth magnets in simply 6 months,” stated another source privy to the conference.
The market delegation were informed in clear terms that the recommendation was to Press Note 3 that limits financial investments from neighbouring nations, specifically China owing to nationwide security.
Federal government modified the foreign direct financial investment policy vide Press Note 3( 2020) on April 17, 2020 following stress along the border which resulted in issues about the tactical nature of Chinese financial investments in India. Press Note 3 makes no direct reference of China and just makes previous federal government approval compulsory for financial investments from nations that share a land border with India, the most impacted are Chinse entities.
Released on November 13, 2025
