Rare Earth Supply Chains: India in Talks with China

India’s Ministry of External Affairs (MEA) has stated that it is in communication with China regarding economic and trade matters, including challenges in the rare earth materials supply chain. According to the MEA’s weekly briefing, India has been in contact with Chinese officials in both Delhi and Beijing to discuss how to optimize the supply chain for rare earths. The MEA further indicated that it is in dialogue with China on several economic and trade topics. The Commerce Secretary also highlighted India’s engagement with China on the supply of rare earth minerals through both commercial and diplomatic channels, with the aim of securing crucial imports. The government is collaborating with industry bodies such as SIAM and ACMA to help them discuss matters with their Chinese counterparts. China’s restrictions are seen as a global response. The Commerce and Industry Minister has characterized China’s rare earth export limits as a global ‘wake-up call’, underscoring India’s dedication to building alternative supply chains and positioning itself as a trusted partner for international companies seeking to lessen their dependence on Chinese suppliers. China’s dominance, with over 90% of the world’s magnet production capacity, has created significant vulnerabilities across multiple sectors, including automobiles, home appliances, and clean energy systems. New Chinese regulations, effective from April 4, require special export licenses for specific rare earth elements and their associated magnetic products. At the recent India-Central Asia Dialogue, India and Central Asian countries expressed interest in joint exploration of rare earth and critical minerals. A recent Crisil Ratings report suggests that disruptions to the supply of rare earth magnets could negatively impact the automotive sector, especially the launch of electric vehicles.