China Rare Earth / India will not bow down to China on rare earth, this is how it will solve the crisis

China Rare Earth: China has imposed an informal ban on the supply of rare earth materials to India, causing a serious crisis in key industries such as automobiles, electronics and renewable energy. Rare earth magnets, which are indispensable for these industries, are now affecting production lines due to limited supply. According to a report by CNBC-TV18, a high-level meeting is scheduled to be held at the Prime Minister's Office (PMO) on July 18, 2025 to deal with this crisis. Key government departments such as the Department of Heavy Industry (DHI), Ministry of Commerce and Ministry of Mines will participate in this meeting.

Impact on industries

The automobile and electronics industries have expressed deep concern about this crisis. Automobile manufacturers have warned that the shortage of rare earth magnets could stall their production lines. On the other hand, the electronics industry has written to the government stating that China has imposed restrictions not only on rare earth materials but also on the deployment of Chinese technical staff and the supply of key manufacturing equipment. These steps are putting India's $32 billion smartphone export target for FY26 at serious risk. Industry organizations say these restrictions could weaken India's competitiveness in global value chains (GVCs).

PMO meeting: Strategy and solutions

A concrete strategy will be formulated to deal with this crisis in the PMO meeting on July 18, 2025. According to sources, the following points will be discussed in this meeting:

Alternative supply chain: Emphasis will be laid on establishing alternative supply chains to avoid such crises in future. This may include agreements for rare earth supply with other countries such as Australia, Canada and African countries.

Promoting indigenous production: The government will review the progress of the Rs 1,345 crore Rare Earth Magnet Incentive Scheme. The scheme aims to promote indigenous production and processing of rare earth materials in India.

Demand from industries: Immediate steps will be considered keeping in mind the demands of the automobile and electronics industries, so that their production capacity is maintained.

India's counter strategy

India sees China's move as an opportunity. The government and industry are working together towards self-sufficiency for rare earth materials. Experts believe that India needs to increase its mining capabilities, adopt recycling techniques and research alternative materials.