India, China in talks on rare earths to ensure supply predictability: MEA

"We are in touch with the Chinese side to bring predictability in supply chain for trade, consistent with international practices," said foreign ministry spokesperson Randhir Jaiswal

India is engaging with China to ensure greater stability in trade supply chains, particularly in light of Beijing’s recent restrictions on rare earth exports, the Ministry of External Affairs (MEA) said on Thursday.

 

According to media reports, the global automotive sector is grappling with China’s export controls on certain rare earth elements used in electric vehicles and other technologies. The resulting shortages have reportedly raised concerns among industry players about potential supply chain disruptions.

 

‘We are in touch with the Chinese side, both here in Delhi as also in Beijing, to bring predictability in supply chain for trade, consistent with international practices,’ said foreign ministry spokesperson Randhir Jaiswal.

 

 

Earlier this week, Commerce and Industry Minister Piyush Goyal said China’s restrictions on the export of rare earth elements and related magnets will have short-term impacts on the domestic automotive and white goods sectors.

 

The rare earth magnet issue

 

In reaction to heightened tariffs imposed by United States President Donald Trump’s administration, China imposed export restrictions from April 4, targeting seven specific rare earth elements and related magnets.

 

The affected materials—samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium—are critical for applications in industries such as defence, energy and automotive technology. Under the revised regulations, Chinese exporters were required to secure special permits before shipping these items abroad.

 

China holds around half of the world’s rare earth reserves and dominates the global market, accounting for approximately 70 per cent of extraction and more than 90 per cent of refining. 

US–China deal

However, on Wednesday, both the United States and China announced that they had reached a preliminary understanding aimed at reviving their trade truce. As part of this arrangement, China has agreed to lift its export curbs on rare earth materials.

 

However, according to The Wall Street Journal, China is placing a six-month cap on export licences for rare earth elements to US automakers and manufacturers. The measure is expected to provide Beijing with additional leverage in trade discussions and heighten uncertainty for US industries dependent on these materials.