The Ministry of External Affairs (MEA) has confirmed that India is in contact with China regarding economic and trade matters, specifically addressing supply chain challenges related to rare earth materials. During a weekly briefing, the MEA spokesperson, Jaiswal, stated that discussions are ongoing with Chinese officials in Delhi and Beijing to streamline the rare earth supply chain. Additionally, the MEA is engaged with China on multiple economic and trade issues. The Commerce Secretary also emphasized India’s commitment to addressing the issue of rare earth minerals, engaging with China commercially and diplomatically to secure essential imports. The government is collaborating with industry organizations such as SIAM and ACMA, facilitating their discussions with Chinese counterparts. It was noted that China’s restrictions on rare earth exports are a global concern, not specifically aimed at India. The Commerce and Industry Minister views China’s export restrictions as a ‘wake-up call,’ highlighting India’s efforts to create alternative supply chains and become a trusted partner for businesses seeking to reduce reliance on Chinese suppliers. China’s significant control over the global rare earth processing market, accounting for over 90% of the world’s magnet production capacity, creates vulnerabilities for various industries, including automobiles, home appliances, and clean energy. New export restrictions from China, implemented on April 4, necessitate special licenses for certain rare earth elements and related magnetic products. Furthermore, India and Central Asian nations have expressed interest in joint ventures for exploring rare earth and critical minerals. A recent Crisil Ratings report indicates that extended disruptions to the supply of rare earth magnets could negatively impact India’s automotive sector, particularly for electric vehicles.
