In this humid July of 2025, as the world races towards clean energy, China has played a move that threatens to jam the wheels of India’s electric vehicle (EV) ambitions.
The world’s largest processor of rare-earth minerals, China, last week announced export restrictions on high-grade magnets used in EVs and wind energy. And with this, an unseen challenge now stands before India’s “Make-in-India” EV revolution.
Why is this restriction so significant?
Almost every electric car, two-wheeler, and even wind turbine motor made in India uses rare-earth magnets. These magnets require minerals like neodymium, praseodymium, and dysprosium—of which over 85% come from China.
In other words, the heartbeat of our EV industry doesn’t come from our own soil, but from Beijing.
So, when China announced these export curbs, Indian auto companies were suddenly on edge. Investors turned their gaze to battery costs, policymakers rushed into emergency meetings, and startups were forced to revisit their roadmaps.
How long can “Make-in-India” stand on China’s support?
In the past few years, India has made EV manufacturing a national priority. From brands like Tata, Mahindra, Ola, Hero to dozens of startups—all have ramped up production. But the harsh truth remains: the heart of these vehicles, their motor magnets, still come from China.
According to a report, in 2024, India imported around 95% of the rare-earth magnets required for EV motors from China. Without these, vehicle range could drop, costs could rise, and production could slow down.
Where are the alternatives? What is India doing?
The government has recently taken important steps: It has intensified exploration of rare-earth minerals in northeastern states and Andhra Pradesh. Plans have also been laid to set up new domestic magnet production units through public-private partnerships.
Additionally, efforts are underway to increase imports of rare earths from countries like Japan, Australia, and Vietnam. Some startups have also begun research on 'ferrite magnets' and 'recycled magnets.'
But experts believe it could take 5–7 years to get new mines fully operational. And until then? This is the phase where India must strike the smartest balance.
Is it only the EV sector at stake?
No. The EV sector is the face of India’s green economy. If China’s policy raises EV costs or stalls production, it could affect dreams of reducing pollution, lowering oil imports, and creating green jobs.
This isn’t just a business crisis—it is a trial by fire for India’s clean energy goals.
Conclusion: A leadership opportunity hidden in crisis
China’s restrictions have shown India a mirror: self-reliance doesn’t come from slogans but from solid strategy. If India rapidly invests today in domestic mining, recycling, and alternative technologies, this crisis itself could free us from dependence on China.
In the end, the question remains: Will India step back in fear of this challenge, or turn it into an opportunity to double the speed of its green revolution? This is a time not to be afraid—but to lead.
Shreya Gupta is a trainee journalist at Cult Current. The views expressed in the article are
her ownand do not necessarily reflect the official stance of Cult Current.