India engaging with China to ensure supply chain for rare earth elements: MEA

Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal said, during a weekly media briefing in the national capital, that they have been in touch with the Chinese side on the issue.

“As you may be aware, in early April, the Chinese Ministry of Commerce and the General Administration of Customs announced the decision to implement export controls on certain rare earth-related items. We are engaging with the Chinese side, both here in Delhi and in Beijing, to ensure predictability in the supply chain for trade, consistent with international practices,” Jaiswal stated.

India sourced over 80 per cent of its 540 tonne magnet imports from China last fiscal.

In April, China, which is the world’s dominant exporter of rare earth magnets, imposed export restrictions on seven rare earth elements and finished magnets, mandating export licences.

Recognising the risk, the government and automakers are taking action on two fronts. In the short term, the focus is on building strategic inventories, tapping alternative suppliers and accelerating domestic assembly under Production Linked Incentive schemes.

For the long term, reducing import dependency will hinge on fast-tracking rare earth exploration, building local production capacity and investing in recycling infrastructure.

Earlier this month, India and five Central Asian countries expressed interest in joint exploration of rare earth and critical minerals, as New Delhi aims to reduce dependence on shipments from China, which has curbed the exports of rare earth materials.

The government wants to develop domestic manufacturing capabilities and is reportedly considering offering production-based fiscal incentives to companies in the field of rare earth materials.