Beijing demands India assurance on rare earth use before exports: Report

China is the world’s biggest producer of rare earth elements.

China has sought guarantees from India that heavy rare earth magnets supplied by it will not be re-exported to the United States and will be used only for domestic needs before resuming shipments to Indian firms, according to a report by the Economic Times (ET).

The report said that Indian companies have already submitted end-user certificates assuring Beijing that the magnets will not be used for manufacturing weapons of mass destruction. However, China wants additional export control guarantees similar to those under the Wassenaar Arrangement, a pact promoting transparency in dual-use technologies. While India is a signatory to the arrangement, China is not.

“China wants to ensure that the heavy rare earth magnets supplied to India do not reach the US,” an official told ET, adding that New Delhi has not yet agreed to such a condition. Another source cited by the paper said Beijing is trying to leverage its dominance in the global rare earth supply chain in ongoing trade talks with Washington.

China controls nearly 90% of global production of heavy rare earth magnets, crucial for electric vehicles, renewable energy, electronics, aerospace, and defence industries. Although Beijing resumed exports of light rare earth magnets to India after the Shanghai Cooperation Organisation summit in September, heavy rare earth supplies remain suspended, ET reported.

A senior government official told the paper that requests for end-use certification have been made, with some companies providing assurances backed by the commerce ministry. Industry executives told ET that the shortage has hit production of motors for electric three-wheelers, cars, and buses.

China had imposed export controls on medium and heavy rare earth-related materials in April, citing national security concerns after US President Donald Trump introduced new tariffs on Chinese goods.