India eyes resolution on China's rare earth curbs impacting auto sector

India is hopeful of a positive outcome from its engagement with China to address issues related to Beijing's export curbs on rare earth magnets, which are mainly used in the auto sector, a top government official said on Monday. 

China's restrictions on the export of rare earth elements and related magnets are affecting the domestic auto and white goods sectors. 

The automobile industry has sought government support in expediting approvals from the Chinese government for importing rare earth magnets used in various applications, including passenger cars. 

Commerce Secretary Sunil Barthwal said that these curbs are against all the countries and are not against India only. 

Since it is impacting the auto sector more, the government is in talks with both the Society of Indian Automobile Manufacturers (SIAM) and the Automotive Component Manufacturers Association of India (ACMA). 

"We are facilitating them to have discussions with their counterparts in China and at the diplomatic level the external affairs ministry and the department of commerce also have spoken to the Ambassador over there," he told reporters here. 

He added that both diplomatic and commercial discussions are going on with China on the issue. 

"We are making all the efforts to see that these essential items of imports can come to India...what I feel that this diplomatic and commercial communication should yield a positive result," Barthwal said. 

China has brought a regime where "perhaps licences will be required, so we are facilitating our importers and our auto players in whatever way possible," he said. 

As per the industry sources, various domestic suppliers have already sought approval from the Chinese government through their local vendors in China. 

China controls over 90 per cent of the global processing capacity for magnets, used across multiple sectors including automobiles, home appliances and clean energy. 

The Chinese government has put restrictions, with effect from April 4, mandating special export licences for seven rare earth elements and related magnets. 

Critical materials include samarium, gadolinium, terbium, dysprosium and lutetium, which are essential in electric motors, braking systems, smartphones and missile technology.