India is facing a challenging situation as Chinese export controls on rare earth magnets are causing disruptions in the supply chain for Indian industries, particularly in the automobile manufacturing sector. The number of Indian companies awaiting licenses from China for rare earth magnets has doubled from 11 to 21 in a short span of time. This change comes after China's recent directive on April 4, which requires exporters of medium and heavy rare earth magnets to obtain a commerce department license along with an end-user certificate from the purchaser.

Among the companies seeking approval are well-known names such as Bosch India, Marelli Powertrain India, Mahle Electric Drives India, TVS Motor, and Uno Minda. Even after fulfilling all the necessary requirements and submitting the required documents, these companies are still awaiting licenses from the Chinese government.

Data from the Society of Indian Automobile Manufacturers reveals that 52 Indian companies rely on Chinese magnets to supply automobile manufacturers across the country. The end-user certificates obtained by these companies ensure that the rare earth magnets will not be used for any malicious purposes, such as manufacturing weapons of mass destruction.

Indian officials are in talks with Chinese authorities to address this issue diplomatically, but progress has been slow. In contrast, the US has managed to secure a bilateral agreement with China for the supply of rare earth magnets, despite the initial trade tensions between the two countries. European automotive component manufacturers have also received approval for rare earth magnet sourcing, while Indian companies are still awaiting clearance from China's commerce ministry.

Industry experts are concerned about potential production disruptions if licensing delays persist, as inventory levels are expected to deplete by early July. Although India's imports of rare earth magnets are relatively small compared to the overall industry size, any delays in the supply chain could have a significant impact on the automobile manufacturing sector.

Overall, the situation highlights the challenges faced by Indian industries due to Chinese export controls on rare earth magnets and the importance of resolving these issues through dialogue and cooperation.