 "Miners are seen at the Bayan Obo mine containing rare earth minerals, in Inner Mongolia, China July 16, 2011. Picture taken July 16, 2011. File Photo/Reuters")
India is actively working to reduce potential supply disruptions arising from China’s restrictions on rare earth exports, according to the country’s economic report for May, released on Friday.
China’s export controls on rare earth materials have caused concern globally, particularly within the auto sector, raising fears of supply chain challenges and production slowdowns, including in India.
Although India possesses the fifth-largest reserves of rare earths worldwide, domestic production remains limited.
During the financial year that ended in March 2025, India imported 53,748 metric tons of rare earth magnets, a crucial component in the manufacture of vehicles, wind energy equipment, medical technologies, and other advanced industries.
”On the domestic front, India has also been taking a series of steps to mitigate possible disruptions,” a report prepared by the federal finance ministry said, citing the launch of a seven-year national initiative aimed at strengthening domestic rare earth supplies.
India is planning to offer incentives to companies to set up rare earth processing and magnet production facilities to meet local demand, people familiar with the matter told Reuters earlier this month.