MEA Pushes For Quick Resolution To China's Rare Earth Curbs

'We remain in touch with the Chinese side, in Beijing as well as in Delhi, to bring predictability in the supply chain.'

IMAGE: Foreign Secretary Vikram Misri meets Chinese Vice Minister Sun Weidong in New Delhi, June 13, 2025. Photograph: ANI Photo

India's ministry of external affairs on Thursday said that the government is in touch with the Chinese side to seek an early resolution to Beijing's April 4, 2025 export restrictions on rare earth magnets, to ease the shortage of these critical minerals in India.

It emphasised the need to bring predictability to supply chains for trade, consistent with international practices.

Addressing the MEA's weekly media briefing, its spokesperson Randhir Jaiswal said that the Chinese ministry of commerce and general administration had announced their decision in early April to implement export controls on certain rare-earth-related items.

"We remain in touch with the Chinese side, in Beijing as well as in Delhi, to bring predictability in the supply chain for trade consistent with international practices," Jaiswal said.

China has a near monopoly on the supply of rare earth elements.

Sources pointed out that, for China, the export of these critical minerals -- used in the manufacture of cars and drones -- is central to its trade negotiations with the United States, and India has suffered collateral damage in these negotiations.

Government sources were hopeful of an early resolution.

Indian Ambassador to Beijing Pradeep Kumar Rawat met Chinese Vice Minister Sun Weidong on June 5, and the two sides had 'an exchange of views' on 'issues of common interest and concern', a Chinese Foreign Ministry statement said.

Sun is in India for a two-day visit starting Friday.

His visit to New Delhi comes six months after Foreign Secretary Vikram Misri visited Beijing, which helped resume the suspended bilateral exchanges between the two Asian neighbours.

In Beijing, in response to a question on whether China would lift export restrictions on rare earth metals to India, as it has begun clearing export licences to the US and European Union, Chinese Foreign Ministry spokesperson Lin Jian said on Thursday, 'We are willing to enhance dialogue and cooperation with relevant countries and regions to jointly keep the stability of global industrial and supply chains.'

Sun is a former Chinese ambassador to India and arrives as part of the foreign secretary-vice foreign minister mechanism that the two countries agreed upon during Misri's visit to Beijing in January.

At the time, the two sides had agreed to resume direct flights, data sharing on transboundary rivers, and the Kailash Mansarovar pilgrimage, all of which were disrupted due to bilateral tensions.

Indian Firms Hopeful Amid Rare Earth Crisis

Kindly note the image has been posted only for representational purposes. Photograph: Kind courtesy Oscar/Pixabay.com

Shine Jacob and Sohini Das

With global automobile majors raising concern over rare earth elements and the magnet crisis owing to export curbs by China, auto firms in India are putting on a brave face and expecting a solution soon.

This is because the government is considering fiscal incentives for domestic production and increasing long-term stockpiles of rare earth magnets.

Around 30 applications from India are stuck at various stages of approval, and that is threatening production halts and inventory depletion.

"Some European majors like Volkswagen have got permits. But no Indian player has got nod so far. We expect a solution soon," said an industry source.

Despite this, sources said industry majors had told the government that production might be affected in six to eight weeks.

In addition to sectors like automotive, defence, and energy, where these rare earth elements and magnets are widely used, makers of medical equipment too are worried.

Rare earth magnets, particularly neodymium magnets, are vital in diagnostic imaging (like magnetic resonance imaging, or MRI) and certain therapeutic applications.

According to a Reuters reports, the ministry of heavy industries in India is in the process of making a production-based fiscal-incentive scheme to boost the domestic manufacturing of rare earth magnets.

The report indicates the government may partly fund the difference between the final price of the 'made-in-India' magnet and the cost of the Chinese import.

The government is also in talks with companies to increase the stockpile.

This is considering the fact that the demand for rare earth elements and critical minerals may increase multifold in India due to its bigger clean-energy ambitions.

China's ministry of commerce in early April imposed export restrictions on several rare earth elements and magnets as a response to American President Donald Trump's tariff increase on Beijing's products.

This resulted in panic across the world, with several European auto supplier plants and production lines already shut down.

CLEPA, Europe's auto supplier association, stated among hundreds of export-licence applications submitted so far, only around 25 per cent got the permit.

The German Association of the Automotive Industry has said its output may come to a halt soon.

Germany's BMW has said that some of its supplier network has been affected.

In Japan, Suzuki Motor has suspended the production of its Swift while Nissan has said it is working with the local government to minimise the impact.

Maruti Suzuki, India's largest automaker, has said the issue will have no immediate impact on its production.

Rahul Bharti, senior executive director for corporate affairs, said the firm had submitted an import application and he might not be able to comment on the matter until there was an official response.

"It is not a restriction. It is an endorsement of end use. In case there is an issue, we will inform all our stakeholders," Bharti said.

China controls 92 per cent of global rare earth magnet production, with other players like Japan (7 per cent) and Vietnam (1 per cent) contributing marginally.

Despite having the fifth-largest rare earth reserves, India produces only 1,500 tonnes of NdPr (neodymium-praseodymium) annually through IREL (formerly Indian Rare Earths Ltd), with a limited downstream magnet-manufacturing capacity.

IREL's production is mainly to cater for units in atomic energy and defence.

Meanwhile, the medical-equipment sector is on high alert.

"The main magnetic field in standard MRI machines is generated not by rare earth magnets but by superconducting magnets ...

"However, rare earth magnets do play a role in auxiliary components such as gradient coils, radiofrequency subsystems, and motion-control mechanisms -- particularly in portable or compact imaging devices.

"This indeed leaves the sector vulnerable to supply-chain disruption, particularly in high-precision sub-systems where rare earth magnets are critical," said Pavan Choudary, chairman, Medical Technology Association of India.

India is now seeing strategic crossovers from the defence sector into medical technology.

Paras Defence & Space Technologies, for instance, is contributing to India's first indigenous MRI project by developing high-performance magnets.

"Companies like Paras, with capital depth and manufacturing acumen, are well positioned to tap emerging rare earth supply chains from geographies such as Australia, the United States, and Vietnam, where alternative supply chains, including processing capacities, are being strengthened," said Choudary.

Magnet crunch