India is on the verge of finalizing a crucial trade agreement with Chile and Peru for rare earth materials. This strategic move aims to diminish India's dependency on China for these critical minerals and neutralize the impact of Beijing's export restrictions, which have been increasingly used as a geopolitical tool.
Strengthening the Supply Chain
Union Minister of Commerce and Industry, Piyush Goyal, stated at an ASSOCHAM event on Friday that India is actively pursuing several strategic measures to enhance the supply of rare earth minerals. These initiatives include negotiating Free Trade Agreements (FTAs) with Chile and Peru, boosting domestic mineral exploration, and engaging startups in recycling and processing efforts, while the Minister urged domestic companies to diversify their supply chains and foster mutual support, similar to practices seen in Japan and Korea, to counter the growing trend of weaponizing trade and supply chains.
China's Strategy Backfires
Goyal highlighted that the government is now focusing on securing rare earth supplies from countries like Australia, Chile, and Peru, which possess significant reserves of these vital minerals. This push comes as China, a major supplier, has imposed export restrictions, disrupting global supply chains. An Indian team is scheduled to visit Chile and Peru soon for the next round of trade talks. India has already implemented a trade agreement with Australia, marking a significant step in this direction.
The Minister emphasized India's commitment to increasing domestic exploration of rare earth minerals. On top of that, he mentioned discussions with startups to extract rare minerals from waste through recycling. Plans are also underway to establish processing plants within India, as current facilities are predominantly concentrated in a single region, while these measures are expected to play a crucial role in making India self-reliant in the rare earth materials sector.
Emphasis on Domestic Production and Recycling
