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India, China signal readiness for talks to resume rare earth magnet trade amid global supply chain strain

| @indiablooms | Jun 14, 2025, at 12:36 am

New Delhi/Beijing: In a move that could ease stress on global industrial supply chains, India and China on Thursday indicated willingness to initiate dialogue aimed at restoring trade in rare earth magnets—a crucial input across sectors like automobiles and semiconductors.

This potential thaw follows months of disrupted supply after Beijing imposed export controls on key rare earth elements (REEs) in April, severely affecting global manufacturing.

At a media briefing in Beijing, Chinese foreign ministry spokesperson Lin Jian stated, “We are willing to enhance dialogue and cooperation with relevant countries and regions to jointly keep the stability of global industrial and supply chains,” reported PTI.

While Lin noted that operational specifics would be handled by relevant authorities, this marks the first time China has publicly acknowledged a possible engagement with India since the restrictions began.

India’s ministry of external affairs also confirmed ongoing efforts to address the disruption.

“We are in touch with the Chinese side in New Delhi as well as in Beijing to bring predictability in the supply chain for trade consistent with international practices,” MEA spokesperson Randhir Jaiswal said at the weekly press briefing.

The development comes as Indian auto and auto component makers prepare to send a high-level delegation to China, hoping to revive REE magnet supplies.

Industry sources say the discussions are expected to centre around easing licensing hurdles and ensuring timely deliveries to prevent production bottlenecks.

In April, China’s ministry of commerce and the general administration of customs introduced new export controls, mandating licences for the export of seven major rare earth minerals and magnets.

The move was part of a broader retaliation against increased tariffs under U.S. President Donald Trump, aimed at regulating the export of dual-use materials with strategic value.

The curbs disrupted supplies for two months, halting sections of the U.S. auto industry and raising concerns in other countries, including India.

According to the International Energy Agency, China holds a dominant position in this space, accounting for over 60% of global REE mining and more than 90% of processing, making it a critical player in the global supply chain.

India’s auto sector is particularly exposed to the disruption, with high-end electric, hybrid, and internal combustion vehicles depending heavily on rare earth-based components.

While China recently resumed selective REE exports to the U.S. after two days of negotiations in London, India had been awaiting a response—until Thursday’s signals of willingness from both sides, which now offer a glimmer of hope for resolution.

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