China Seeks U.S. Guarantee from India on Rare Earth Magnet Supply Amid Export Controls
By TOI Tech Desk | Updated: October 10, 2025, 12:07 IST
In a significant development impacting the global rare earth elements market and international trade dynamics, China has tightened export controls on its rare earth resources, while reportedly pressing India for assurances that rare earth magnets supplied by China to India will not be re-exported to the United States.
China’s Tightening of Rare Earth Export Controls
China, which dominates over 90% of global rare earth production and processing, has intensified restrictions on the export of rare earth elements and processing technologies. This move particularly targets end-users in the defense and semiconductor sectors abroad, reflecting Beijing’s strategic leverage over these critical materials.
Rare earth elements, a group of 17 metallic elements, are crucial in manufacturing a wide array of high-tech and defense products — from electric vehicles and aircraft engines to military radar systems. Given their essential role in modern technology, China’s new export policies have significant geopolitical and economic implications.
Demand for an "American Guarantee" from India
According to reports citing sources familiar with the matter, China is now seeking an explicit "American guarantee" from India concerning the rare earth magnets it exports. Beijing wants India to promise that these heavy rare earth magnets will be utilized exclusively within India and will not be forwarded or re-exported to the United States.
This demand appears to be a strategic element in China’s broader trade negotiations with the U.S. The Chinese government reportedly aims to ensure that any supply of rare earth magnets channeled to India does not indirectly support U.S. industries or defense programs.
An insider familiar with discussions stated, “Our understanding is that China is looking at some deal with the U.S. on heavy rare earth magnets and is unwilling to release supplies without guarantees that there will not be any diversion.”
So far, the Indian government has not agreed to such a request, maintaining a cautious approach in balancing its trade relations with both the U.S. and China.
Export Control Guarantees and the Wassenaar Arrangement
In addition to the “American guarantee,” China is said to be pushing for export control agreements modeled on the Wassenaar Arrangement—a multilateral export control regime that promotes transparency and responsibility regarding the transfer of dual-use technologies for international security purposes among its 42 member states.
While India is a signatory to this arrangement, China is not, adding complexity to the negotiation dynamics. Indian companies have already submitted end-user certificates stating that rare earth magnets supplied will not be used in the production of weapons of mass destruction, aiming to comply with international security protocols.
Strategic Context and Upcoming Diplomatic Talks
Observers suggest that China’s enhanced export restrictions on rare earth magnets will serve as a major bargaining chip in upcoming trade discussions with the United States. This tightening precedes a scheduled face-to-face meeting between then-U.S. President Donald Trump and Chinese President Xi Jinping in South Korea, highlighting the heightened stakes in U.S.-China trade relations.
Furthermore, China plans to expand restrictions on technology exports related to rare earth magnet manufacturing to include a wider variety of magnet types. Such measures underscore China’s intent to maintain a tight grip on critical components essential to emerging technologies and military capabilities.
Implications for India and the Global Market
India finds itself at a delicate crossroads, balancing its own industrial and technological growth needs with the geopolitical pressures emanating from the world’s two largest economies. As a significant recipient of Chinese rare earth magnets, India’s response to Beijing’s demands will be closely watched by global markets, technology companies, and strategic analysts.
The situation reinforces the strategic importance of rare earth elements as not merely economic commodities but also pivotal assets in international diplomacy and security.
About the Author:
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