Domestic industry seeks relief from China’s export curbs. Exports to Japan may be difficult to stop as they fall under a bilateral agreement.
India has reportedly directed state-owned India Rare Earths Ltd (IREL) to suspend a long-standing export agreement with Japan, according to Reuters, citing unnamed sources. The deal, which has been in place since 2012, primarily involves the supply of neodymium, a key component used in high-performance magnets, to a Japanese trading house for processing and subsequent shipment to Japan. However, because the exports are governed by a bilateral government agreement, a complete suspension may not be immediate. Sources noted that IREL is expected to pursue a negotiated solution.
The move comes against the backdrop of China’s export controls on certain rare earth elements and related products, including magnets, which are crucial components in electric vehicles and other advanced technologies. According to The Times of India, especially the country’s automotive industry is awaiting relief from ongoing supply disruptions triggered by China’s tightening of rare earth exports.
India holds nearly 7 million metric tons of rare earth reserves, according to the U.S. Geological Survey (PDF), placing it among the top three globally. However, its mining output is dwarfed by global competitors. IREL, the country’s sole rare earth miner, has historically exported much of its production due to a lack of domestic processing capacity. That landscape is now shifting.
India Seeks to Benefit More from Its Critical Mineral Wealth
In January, India’s Union Cabinet approved the National Critical Minerals Mission (NCMM), a nearly $2 billion initiative aimed at strengthening the country’s domestic capabilities in the exploration, processing, and recycling of critical raw materials. The program spans the entire value chain, encompassing both domestic development and international partnerships.
Earlier this year, Prime Minister Narendra Modi also urged Indian industries to move beyond raw material exports and develop midstream and downstream capabilities. He criticized the current dependence on importing finished goods made from India’s own raw materials, calling the practice “unacceptable” for a growing economy (we reported).
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