Sona Comstar, whose application was recently rejected by China’s commerce ministry due to procedural issues, has reapplied and is among the 21 companies, said a senior industry executive.
“These companies have duly filled in and got endorsed the end-user certificate and shipped the requisite documents to their suppliers for procuring rare earth magnets from China, but licences are yet to be awarded by the government there,” said the executive, who did not wish to be identified.
It comes in the wake of China’s April 4 order mandating exporters that ship medium and heavy rare earth magnets to seek a licence from its commerce department after getting an end-user certificate from the buyer. The certificate requires buyers to make certain guarantees.
These include the guarantee that these items will not be used for storing, manufacturing, producing or processing weapons of mass destruction and their delivery systems.
Although the order had come in response to Donald Trump’s tariffs, the US President this week announced a bilateral trade deal under which China will supply rare earth magnets to the US.Meanwhile, Indian authorities are in the process of reaching out to their counterparts in China via diplomatic channels to secure meetings for a dialogue to resolve the issue, but not much has happened on that front yet, said the sources.While some automotive parts makers in Europe recently got approvals to source rare earth magnets, their Indian arms are yet to get a go-ahead from China’s commerce ministry. The issue is complicated by the two nations’ tense business and political relationship, experts said.
As per the latest data collated by the Society of Indian Automobile Manufacturers, 52 companies based in the nation source magnets from China to supply to automobile manufacturers across India.
If licences are not awarded soon, industry stakeholders fear disruptions in production as stocks are set to run out in early July. India imported 870 tonnes of rare earth magnets valued at ?306 crore in 2024-25. “While the value of imports compared to the industry size is minuscule, vehicles cannot be manufactured even if we are short of one component where a rare earth magnet is being used,” said an executive.
