Piyush Goyal Calls China's Rare Earth Curbs a 'Wake-Up Call' for India's Supply Chain Shift

• India is working to reduce its dependency on China for rare earth minerals, which are crucial for technologies like smartphones and defense systems, following China’s recent export restrictions to Japan.
• The country aims to establish alternative supply chains, build local processing and refining capabilities, and secure partnerships with countries like Australia, the US, and nations in Africa.
• Minister Piyush Goyal emphasized that India must act quickly to create a strong rare earth supply chain, prioritizing R&D and infrastructure investments to become a competitive force in the global market.

India is preparing to ensure its place in rare earth minerals, which are necessary for a vast array of technologies from smartphones to defense systems. China's recent imposition of restrictions on exporting rare earth metals to Japan has created apprehensions globally, as China controls the world supply of these metals. India's Minister of Commerce and Industry Piyush Goyal has termed these developments a 'wake-up call' for the country to move towards establishing alternative supply chains for rare earths and to reduce its reliance on China.

China's control of the supply of rare earth elements has been a strategic strength for decades, but it poses a risk to other countries that depend on those elements for manufacturing technology and vital infrastructure. India, an importer of much of its rare earth minerals from China, is now seeking to broaden its sources and build local capabilities. Goyal reiterated that India needs to act fast in establishing a strong supply chain of these minerals to protect its own interests, given the increase in geopolitical tensions in the region.

India's attention is not only to secure imports but also to create rare earth processing and refining capabilities within the country. India has potential reserves for such minerals, but the difficulty is in extracting, processing, and refining them cost-effectively to satisfy increasing demand. Goyal also pointed out that India has already commenced work to create alternate sources of supply, including looking at joint ventures with rare earth mineral-abundant countries like Australia, the US, and Africa.

The government is also giving top priority to research and development in rare earth processing technology and is focusing efforts to bring in investments to establish necessary infrastructure. The larger vision is to make India a competitive force in the international rare earth value chain while decreasing exposure to external disruptions. Through diversification of the supply base and investing in local capabilities, India seeks to achieve long-term economic and technological security.