China announces a new export control regime covering rare earths, technologies, and related materials.
Foreign companies will need approval to export products containing even trace Chinese rare earths.
The rules extend to processing technologies, equipment, and intellectual property for the first time.
Restrictions also apply to lithium batteries and graphite, vital to global clean tech supply chains.
The move could complicate India’s efforts to secure inputs for its EV, renewable energy and defence sectors.
China, which imposed export restrictions on rare earth or permanent magnets on April 4, 2025, has announced a sweeping new export control regime covering rare earths and related technologies, tightening its grip on critical minerals that underpin the global green and digital economy.
The move comes ahead of an expected meeting between United States' President Donald Trump and President of China Xi Jinping later this month. Under the new commerce ministry rules, foreign companies will now need Beijing’s approval to export magnets containing even trace amounts of China-sourced rare earth materials, or those produced using the country’s extraction, refining, or magnet-making technologies.
China mines around 60 per cent and processes nearly 90 per cent of the world’s rare earths — elements vital for products ranging from wind turbines and solar panels to consumer electronics such as smartphones and speakers.
The revised rules, issued by the Ministry of Commerce, extend existing restrictions beyond raw minerals to include processing technologies, specialised equipment and intellectual property. For the first time, they explicitly bar supplies linked to foreign defence and semiconductor applications.
In a related announcement, the ministry also introduced new restrictions on the export of lithium batteries and certain forms of graphite — key materials in the global technology and electric vehicle supply chains, which China largely dominates.
The fresh curbs come a day after US lawmakers called for broader bans on the export of chipmaking equipment to China. “This move is aimed primarily at the US but will inevitably affect other countries that depend on Chinese rare earths,” said Geoffrey Gertz, senior fellow at the Centre for New American Security.
For India, the tightening of Chinese controls could complicate efforts to secure rare earth inputs crucial to its electric vehicle, renewable energy and defence industries, at a time when New Delhi is seeking to develop a stable domestic supply chain and build advanced manufacturing capacity in rare earth materials.
Heavy rare earth magnets are essential for electric vehicle motors, radar systems and wind turbines. Substitutes such as ferrite magnets are less efficient and perform poorly in high-temperature applications. India has been exploring alternative supply partnerships with Japan and South Korea, while also pushing for domestic exploration.
The government is reportedly close to approving a Rs 7,300 crore incentive scheme to promote rare earth magnet manufacturing, alongside a Rs 1,500 crore initiative to recycle critical minerals under the National Critical Minerals Mission for 2026-2031.