Is India Collaborating with China to Secure Rare Earth Element Supply Chains?
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Synopsis
India is taking proactive measures to secure its supply chain for rare earth elements in light of China's recent export restrictions. The government is engaging with Beijing while diversifying sources and enhancing domestic production capabilities. Discover how India plans to navigate these challenges in the critical minerals sector.
Key Takeaways
- India is actively engaging with China to ensure a stable supply chain for rare earth elements.
- Measures include building strategic inventories and exploring alternative suppliers.
- Over 80% of India's magnet imports come from China.
- Long-term strategies focus on enhancing domestic production capabilities.
- India aims to collaborate with Central Asian countries for rare earth exploration.
New Delhi, June 12 (NationPress) As Indian manufacturers, particularly in the automobile industry, deliberate on strategies to address the potential shortage of rare earth elements following China's export restrictions, New Delhi announced on Thursday that it is actively communicating with Beijing to guarantee stability in the supply chain for efficient trade.
Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal stated during a weekly media briefing in the national capital that they have maintained contact with their Chinese counterparts regarding this matter.
“As you may know, in early April, the Chinese Ministry of Commerce along with the General Administration of Customs revealed their plan to implement export controls on specific rare earth-related products. We are in discussions with the Chinese side, both in Delhi and Beijing, to ensure stability in the supply chain for trade, adhering to international norms,” Jaiswal declared.
India imported more than 80 percent of its 540-tonne magnet requirements from China in the last fiscal year.
In April, China, recognized as the leading global exporter of rare earth magnets, enforced export restrictions on seven rare earth elements and completed magnets, requiring export licenses.
In light of this risk, the government and automotive manufacturers are taking steps on two fronts. In the immediate term, efforts are concentrated on building strategic stockpiles, exploring alternative suppliers, and expediting domestic assembly under Production Linked Incentive schemes.
For the long haul, decreasing import dependency will rely on expediting rare earth exploration, enhancing local production capabilities, and investing in recycling infrastructure.
Earlier this month, India and five Central Asian nations expressed their eagerness for collaborative exploration of rare earth and critical minerals, as New Delhi seeks to lessen its reliance on shipments from China, which has restricted the export of rare earth materials.
The government aims to foster domestic manufacturing capabilities and is reportedly contemplating offering production-based financial incentives to companies engaged in rare earth materials.
Point of View
It is essential for India to strengthen its ties with China while also exploring alternative sources for rare earth elements. This approach not only ensures a stable supply chain but also encourages domestic manufacturing growth, ultimately benefiting the economy.
NationPress
14/06/2025
Frequently Asked Questions
What are rare earth elements?
Rare earth elements are a group of 17 chemical elements used in various high-tech applications, including electronics, renewable energy, and advanced manufacturing.
Why is India concerned about rare earth element shortages?
India relies heavily on imports for rare earth elements, particularly from China. Restrictions on exports can lead to supply chain disruptions affecting various industries, especially automotive manufacturing.
What measures is India taking to secure its supply chain?
India is engaging with China, building strategic inventories, exploring alternative suppliers, and investing in domestic production capabilities for rare earth elements.
How much of India's rare earth imports come from China?
India sources over 80 percent of its magnet imports, totaling 540 tonnes, from China.
What long-term strategies is India considering?
In the long run, India plans to reduce import dependency through rare earth exploration, local production enhancement, and recycling infrastructure investment.
