India avoids the direct influence of China’s rare earth element curb, but fears continue

Workers transport soil containing rare earth elements at a port in Lianyungang, Jiangsu Province, China. document. |Photo source: Reuters

Trade data shows that India’s imported rare earth elements (REEs), such as dysprosium, Gadolinium, Lutetium and Samarium, blocked domestic supply chains for at least a few months (at least a few months). As part of the U.S.-China trade war, Beijing imposed export restrictions on seven “heavy” REEs, and refineries could export them to China unless they were specifically authorized.

These developments highlight the Indians’ attempt to ensure access to critical minerals in general, especially REE. The opportunity to obtain minerals and REE used in production is a parallel focus when the government tries to attract companies to transfer more of their semiconductor and defense electronics supply chains to India.

So far, as many of these manufacturers are at a relatively early stage, the number of REEs imported into India is very low. According to data shared by the Ministry of Mines earlier this month in Parliament (before reported export restrictions), only 2,270 tons of REES and REES of REES were brought into the country in 2023-24.

As a result, most of the possible supply shocks of China’s curb have moved chain stores to countries like Japan, which have faced such curbs in the past and have worked hard to accumulate inventory for months ahead of schedule. Therefore, India-specific destruction may not disperse immediately.

Key minerals

Rees is one of the thirty substances that the Union Government has listed as a key mineral, and its production and import have been taken by the Ministry of Mines as a priority. Even before China curbs, the government will be overly dependent on the issue of Chinese suppliers, a question of possible consequences in the future.

“The production and processing of many critical minerals is geographically concentrated, leaving global supply vulnerable to several risks,” the ministry said in its January introduction. “China’s restrictions on certain critical minerals, the Russian-Ukrainian war, and other issues highlight the vulnerability of critical minerals and the demand for diversified sources.” When China, these loopholes are the last feeling. Also restricted exports antimony.

Under that mission, Finance Minister Nirmala Sitharaman announced last year during the union budget introduction that the government will simplify exploration activities, fund research and permits to conduct more mineral block auctions.