Introduction
Rare earth elements are the hidden backbone of today’s clean energy and advanced technology revolution. From electric vehicle (EV) motors to military hardware, these critical materials power a vast range of high-tech products. China controls about 90% of the world’s rare earth production, making it a dominant player. Recently, China’s New Rare Earth Rules targeting not just the export of these materials but also the experts who work with them.
These changes could seriously disrupt global technology supply chains and slow India’s green energy ambitions.
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Quick Overview:
China requires rare earth companies to register their technical experts and collect passports to monitor and restrict overseas travel.
Seven rare earth elements—like samarium and dysprosium—face stricter export controls.
Export licenses for U.S. firms are limited to six months, increasing uncertainty.
A new national tracking system demands companies report trade volumes and customer details.
India’s EV sector faces supply risks as it depends heavily on imported rare earth magnets.
Background: China’s Rare Earth Dominance
Rare earth elements (REEs) are 17 chemical elements crucial for manufacturing magnets, batteries, electronics, and military gear.
China mines, processes, and refines the majority of these materials, especially the magnets that power EV motors, wind turbines, drones, and fighter jets.
In early 2025, China added seven medium and heavy rare earth elements—including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—to its export control list. These materials are vital for advanced clean technologies and defense systems.
| Rare Earth Element | Key Uses | Strategic Importance |
|---|---|---|
| Samarium | Military magnets, missile guidance | Critical for defense systems |
| Dysprosium | High-temperature magnets in EVs | Essential for electric motors |
| Terbium | Fluorescent lighting, EV motors | Important for energy efficiency |
| Scandium | Aerospace alloys, 3D printing | Used in advanced manufacturing |
New Rules Targeting Talent and Trade
China’s Ministry of Commerce has asked rare earth firms to submit detailed lists of their technical staff, including expertise and education. Firms must also collect employees’ passports to monitor foreign travel.
This unusual step shows China is not only guarding raw materials but also protecting intellectual capital. Restricting the movement of experts reduces the risk of knowledge transfer to rival countries.
Simultaneously, China launched a national tracking system to oversee rare earth magnet production and export. Companies now must disclose trade volumes and customer details, enabling tighter government control.
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Impact on India’s EV and Clean Tech Sector
India aims for a major electric vehicle revolution, targeting 30% EV sales by 2030 in passenger vehicles. However, the country currently depends heavily on imported rare earth magnets, mainly from China or its suppliers.
Without secure access to rare earths, India faces:
- Higher costs for EV components
- Delays in domestic EV manufacturing growth
- Challenges in meeting climate goals
India holds some rare earth reserves but lacks large-scale refining and processing infrastructure. Developing these capabilities takes years and significant investment.
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The Bigger Picture: Rare Earths as the “Silicon” of Clean Energy
Think of rare earths as the “silicon chips” for the clean energy era. Just as silicon transformed computing, rare earth magnets enable the motors and electronics of EVs, wind turbines, and military hardware.
China’s tightening grip is like controlling the supply of silicon during the PC boom—it can dictate who leads the future.
This strategic chokehold forces countries to rethink supply chains, boost domestic mining, and develop recycling and substitution technologies.
Conclusion
China’s new rare earth rules are more than just trade restrictions—they represent a strategic move to control the future of technology and energy.
For India and the world, the message is clear: diversify sources, build local capacity, and reduce dependence on a single dominant supplier.
Only then can the global green transition and advanced technology sectors thrive without disruption.
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