Explainer: Why China's rare earth export restrictions are worrying India
China just rolled out stricter rare earth export rules this month, asking importers (like India) to prove these materials won't be re-exported and will only be used for specific purposes.
Since April 2025, China has made end-user certificates mandatory, and now, with the new no re-export clause, Indian industries—especially auto, electronics, and electric vehicles—are left facing fresh uncertainty.
Why the new rules are a headache for India
China controls most of the world's rare earth supply chain—over 60% of production and 90% of processing.
So even if India tries to buy from elsewhere or build its own capacity (with a ₹7,300 crore push for local magnets), these new rules still apply or make alternatives pricier.
For now, India's green tech and EV dreams are tightly linked to Chinese imports—and these changes could mean higher costs or project delays until domestic options catch up.