China has cut rare earth magnet exports to India, which will soon pose new manufacturing challenges for Indian automakers and electric vehicle (EV) manufacturers. The magnets are needed by traction motors and other systems in automobiles and EVs.
While the sudden ban may cause supply chain disruption and hold EV production in check, Indian automakers and auto parts manufacturers have appealed to the Indian government for relief.
The new Chinese regulation is that exporters would only supply magnets to firms that possess an end-user certificate in a specific format.
The Chinese government is making end-user credentials mandatory before it permits any rare earth magnet exports.
Also, the document must be endorsed by the Chinese Embassy and the Indian Ministry of External Affairs, which should certify that the magnets will not be transferred to other entities or used in weapons.