India's Strategic Moves to Secure Rare Earth Supply Amidst China Export Controls

India is making strategic moves to secure uninterrupted access to rare earth materials as China imposes export controls that threaten global supply chains. A senior government official confirmed ongoing negotiations with China for the procurement of permanent magnets composed of these critical minerals, vital for industries including electric vehicles and defense.

The Indian government is not only engaging in talks with China but is also investigating alternative supply routes and boosting domestic sources to mitigate dependency. April witnessed China announcing export controls on certain rare earth items, resulting in a global shortage that has particularly impacted sectors like defense and electronics.

To address this, India seeks to diversify its rare earth supply chain through imports, domestic mining, and international alliances. Investments in research are underway to enhance refining capabilities within the country. Diplomatic efforts are being made to ensure stable, affordable access to these materials, and a budget has been allocated to incentivize domestic production of rare earth magnets.

The government is contemplating a Production Linked Incentive (PLI) scheme targeting rare earth magnets and critical mineral recycling to boost domestic output. Collaborations with nations such as Australia, the US, and Vietnam aim to solidify these efforts further. Partnerships like the India-US Critical Minerals Partnership and QUAD are instrumental in fortifying access through global cooperation.

Additionally, reforming mining regulations and promoting private sector involvement are key elements of the strategy. With China dominating over 90% of the global magnet production capacity, the urgency to find alternative suppliers has never been more critical, as these materials fuel various industries from automotive to clean energy.

The National Critical Mineral Mission, approved by the Union Cabinet in January 2025, represents another cornerstone of India's strategy, earmarking substantial expenditure and investments to support these efforts. Encouragingly, there is a push for Indian companies to mine and explore critical minerals overseas, reflecting a holistic approach to meet domestic industry needs.

Rare earth materials are indispensable across several industrial sectors. Import statistics show that India's annual intake of related compounds has averaged USD 33 million recently, with rare earth magnet imports significantly higher at an average of USD 249 million per year. This reflects the burgeoning demand and India's proactive steps to secure a stable supply chain. (ANI)

(With inputs from agencies.)