China showed willingness to enter into dialogue with India for relaxing its export ban on rare earth elements, holding out the promise of a resolution to disrupted supply chains essential to major industries.
The Chinese Foreign Ministry spokesman Lin Jian stated on Thursday that Beijing is “willing to strengthen dialogue and cooperation with relevant countries and regions” in a bid to secure global industrial and supply chain stability. His statement was in response to a question on whether China would remove rare earth export curbs to India, particularly as it has been recently allowing export licences to the United States and European Union. However, Lin offered no concrete guarantees, adding that any decision would be made by appropriate Chinese authorities.
India’s Ministry of External Affairs (MEA) has confirmed continued dialogue with Chinese authorities to find predictability in trade, specifically regarding rare earth materials. MEA spokesman Randhir Jaiswal said that Indian officials have been holding talks both in New Delhi and Beijing since April after China imposed new export restrictions on some rare earth products.
The problem came into focus at the latest meeting between Indian Ambassador Pradeep Kumar Rawat and Chinese Vice Minister Sun Weidong, in which bilateral issues were raised.
The rare earth limitations have alarmed Indian industries that are dependent on these elements, particularly in the automotive, electronic, and renewable energy industries. Industry sources point to severe disruptions arising out of the supply deficit.
China controls the world rare earth market, producing 61% of the world’s mining and 92% of the processing, the International Energy Agency says. Even after recent US-China negotiations resulted in selective export approvals, India still waits for an official word from Beijing.
In turn, an Indian auto industry delegation is said to be preparing to visit China to discuss magnet imports and source supply chains for local production.