India in touch with China over rare earth supply chain issues: MEA

The Ministry of External Affairs (MEA) said that India is in touch with China on several economic and trade issues, including the supply chain issue of rare earth materials.

Addressing a weekly briefing on Thursday, Jaiswal said, "On trade issues on rare earth, yes, we have been in touch with the Chinese side, both in Delhi and also in Beijing, and we have been talking to them as to how we can streamline the supply chain issue on rare earths."

"We are in touch with the Chinese side on several economic and trade issues, as and when anything is required," he added.

Meanwhile, commerce Secretary Sunil Barthwal on Monday highlighted India's engaged with China both commercially and diplomatically on the issue of rare earth minerals supply and is making all efforts to ensure essential imports.

The commerce secretary noted that the government is also in touch with industry organisations like SIAM and ACMA for impact on the auto sector

"We're engaged with SIAM and ACMA, facilitating them to have discussions with Chinese counterparts," the commerce secretary said.

He noted that China's rare earth move was a global response, and not just against India.

Commerce and Industry Minister Piyush Goyal recently described China's rare earth export restrictions as a global "wake-up call," emphasising that India is actively building alternative supply chains while positioning itself as a trusted partner for international businesses seeking to reduce their dependence on Chinese suppliers.

China's overwhelming control of global rare earth processing - commanding over 90 per cent of the world's magnet production capacity--has created significant vulnerabilities for industries worldwide. These materials are critical across multiple sectors, including automobiles, home appliances, and clean energy systems.

Beyond China, there are only a few alternative suppliers.

The new Chinese restrictions, effective from April 4, require special export licenses for certain specific rare earth elements and their related magnetic products.

Separately, India and Central Asian countries -- Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and, Uzbekistan -- have recently expressed interest in joint exploration of rare earth and critical minerals at the recently held India-Central Asia Dialogue.

Rare earth magnets, low in cost but critical in function, could emerge as a key supply-side risk for India's automotive sector if China's export restrictions and delays in shipment clearances persist, according to a report by Crisil Ratings last week.

The rating agency said this week that a disruption lasting more than a month can already impact electric vehicle (EV) launches, affect production, and weigh on the sector's growth momentum.

Rare earth magnets are integral to permanent magnet synchronous motors (PMSMs) used in EVs for their high torque, energy efficiency and compact size. Hybrids also depend on them for efficient propulsion.