China's Rare Earth Ban Disrupts Indian Industry Across Five Sectors

Economists at the State Bank of India have raised alarms over China's recent ban on rare earth trade, predicting a significant impact on India's domestic production and exports across multiple sectors.

According to a detailed report, India's import of rare earths and compounds valued at USD 31.9 million and rare earth magnets at USD 291 million in FY25, reflects a trend of increasing dependence on these materials. China's dominance in this trade line poses challenges to India's industrial growth.

The report warns that sectors like transport equipment, basic metals, machinery, construction, and electrical along with electronics will be the hardest hit. It suggests that Indian financial institutions could also feel the effects of this ban. To counteract these challenges, the report advocates for increased domestic exploration of rare earth resources and highlights initiatives like Odisha's Rs 8,000-crore scheme as vital steps.

(With inputs from agencies.)