India, China in Talks on Rare Earth Supply: MEA

New Delhi

As Indian industries, especially the automobile sector, face possible shortages of rare earth elements due to China’s export restrictions, New Delhi confirmed on Thursday that it is in talks with Beijing to maintain a stable supply chain.

Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal said that India is in regular contact with China, both in Delhi and Beijing, following China’s April decision to impose export controls on certain rare earth-related products. These controls include export licensing for seven rare earth elements and magnets, of which India imported over 80% from China last fiscal year.

To handle the situation, the Indian government and manufacturers are working on both short- and long-term strategies. In the short term, they are focusing on building stockpiles, finding alternate suppliers, and promoting domestic assembly under Production Linked Incentive (PLI) schemes.

For the long run, the plan is to reduce import dependence by fast-tracking rare earth exploration, boosting local manufacturing, and investing in recycling facilities.

Earlier this month, India and five Central Asian countries showed interest in exploring rare earth and critical minerals together, signaling India’s intent to diversify sources and strengthen domestic capabilities. The government is also considering offering financial incentives to companies involved in rare earth production, aiming to support self-reliance and reduce dependence on Chinese exports.