India’s dependence on China for permanent magnets is growing, so is the world's

China is the world’s largest producer of permanent magnets.

India has become increasingly dependent on China for permanent magnets, critical for a range of products from appliances, consumer electronics to automobiles, over the past decade, a point of concern because of the tense ties between the two countries.

A Moneycontrol analysis shows that this reliance is not unique to India. Several major economies' dependence on China has deepened during the same period, as the country expanded its dominance in the global magnet trade.

China is the world’s largest producer of permanent magnets. Some estimates suggest that it produces over 80 percent of the world's rare earth magnets.

China’s share of global exports of permanent magnets made from metal rose from 49.6 percent in 2012 to 63.5 percent in 2024. For non-metal-based permanent magnets, its global share increased from 50.8 percent to 59.1 percent during the period.

In 2024, China accounted for 82.9 percent of metal-based permanent magnets imported by India, up from 73.5 percent in 2013.

In the non-metallic magnet segment, China’s share climbed from 59.5 percent to 63.8 percent.

In value terms, India imported $199 million worth of permanent magnets from China in 2024, a slight dip from $202 million in 2023.

India’s overall imports of permanent magnets have nearly tripled since 2019, pointing to growing demand amid limited domestic manufacturing capacity. These magnets are critical for electric vehicles as well and India has been encouraging EVs to lower emissions and also its reliance on fossil fuels.

China’s dominance of the permanent magnet market is complete. A broader analysis shows that among 78 countries that imported permanent magnets and related metal articles, 41 had over 60 percent dependence on China.

Countries across regions have varied but substantial dependence on China.

Pakistan, for instance, sourced its entire supply of permanent magnets from its “ironclad friend” in 2024. The European Union recorded a 90 percent reliance on Chinese imports, while South Korea’s dependence stood at 87.4 percent. In the case of the United States, three-quarters of its permanent magnet imports originated from China.

Leveraging dominance

In April, China restricted imports of seven rare earth elements and magnet products in response to tariffs imposed by the United States. These restrictions raised concerns among several countries dependent on Chinese supply.

The situation eased last week when India’s Directorate General of Foreign Trade issued 30 import certificates, allowing the resumption of imports from China. These certificates clarified that the shipments would not be used for defence purposes or re-exported to the United States, addressing China’s stated concerns.