India’s Discussions with China on Rare Earth Exports

Ensuring Stability in Trade

India is in talks with China. The goal is to achieve stable and predictable trade. This comes after China’s recent limits on rare earth exports, which have disrupted the global car industry.

Government Efforts

“We are talking to China, both in Delhi and Beijing. We want predictable supply chains for trade. This should follow international practices,” said Randhir Jaiswal. He is the spokesperson for India’s External Affairs Ministry. He spoke at a press briefing on Thursday.

Impact on Automakers

China’s export limits on rare earth materials have caused concern among carmakers worldwide. Maruti Suzuki, India’s largest carmaker, has reduced its near-term production targets for its first electric vehicle. This is due to a shortage of raw materials, as reported by Reuters earlier this week.

Production Targets

The company now aims to produce just 8,000 units by September. This is a significant reduction from the original plan of over 26,000 units.

China’s Export Restrictions

China has tightened export restrictions on key rare earth elements and magnets. These materials are essential for electric vehicle motors. Since April 4, Beijing has required special licenses for exporting seven types of rare earths, including:

• Samarium
• Gadolinium
• Terbium
• Dysprosium
• Lutetium

These materials are vital for EV propulsion systems and other high-tech applications like missiles and defense electronics.

Current Production Status

“As of now, there is no impact on production,” said Maruti Suzuki Chairman R.C. Bhargava earlier this week. However, supply-side risks remain. China controls over 90% of global processing capacity for these crucial materials.

Indian Automakers’ Response

Several Indian automakers have asked the government for help. They want faster approvals from Chinese authorities to import rare earth magnets through local vendors. However, no licenses have been granted yet. This has led to growing uncertainty in the EV and hybrid vehicle manufacturing sectors.

Importance of Rare Earth Magnets

Rare earth magnets are critical components in permanent magnet synchronous motors (PMSMs). These are used in EVs for their high torque, efficiency, and compact design. While internal combustion engine vehicles use them sparingly, they are crucial in electrified powertrains.