China restricts rare earth exports affecting India

Source: The post China restricts rare earth exports affecting India has been created, based on the article “Why did China block exports of rare earth elements?” published in “The Hindu” on 22 April 2025. China restricts rare earth exports affecting India.

UPSC Syllabus Topic: GS Paper2-International Relations-Effect of policies and politics of developed and developing countries on India’s interests.

Context:  The U.S.–China trade war has intensified after China imposed export controls on rare earth elements (REEs). These elements are vital for global industries, including electronics and defence. The move affects global supply chains and has prompted responses from countries like India.

For detailed information on RARE EARTH MINERALS read this article here

Understanding Rare Earth Elements

1. What Are Rare Earths?
   REEs are 17 chemical elements found in the earth’s crust. They are not rare in quantity but are hard to extract and purify. Countries like China, India, Myanmar, Australia, and Japan have natural reserves.
2. Targeted Elements and Their Uses
   China’s export restrictions target seven REEs:

• Dysprosium – used in hard disks and electric car motors.
• Gadolinium – used in nuclear reactor shielding and medical devices.
• Lutetium – found in PET scanners and petroleum refining.
• Samarium – powers magnets in personal electronics.
• Scandium – used in fighter aircraft alloys.
• Terbium – used in lighting systems.
• Yttrium – used in cancer treatment and superconductors.

China’s Export Restrictions

1. Scope and Effect: China refines almost all heavy REEs used globally. The new export rules apply to all refiners exporting REEs outside China.
   Though not a total ban, the permit process may delay global supplies for several weeks.
2. Global Dependence: China’s control over REE refining gives it strategic leverage over vital manufacturing sectors, including defence and electronics.

Impact on India

1. Limited Immediate Impact: India may not face immediate disruptions. Advanced manufacturing often happens in China and Japan, and Japan has built stockpiles to manage supply shocks.
2. India’s Current Capacity: India holds around 6% of global REE deposits. However, mining and refining activities are minimal due to environmental concerns. State-owned Indian Rare Earths Ltd extracts light REEs like monazite in Kerala. In 2023–24, India imported only 2,270 tonnes of REEs.

India’s Strategic Response

1. National Critical Mineral Mission (NCMM): India has launched the NCMM to secure critical mineral supply chains. Key steps include:

• 1,200 exploration projects.
• Offering exploratory licenses.
• Auctioning mineral blocks.
• Boosting domestic production and foreign sourcing.

2. Need for Diversification: The government says that China’s restrictions, the Russia–Ukraine war, and other issues prove the need to diversify critical mineral sources.

Question for practice:

Examine how China’s rare earth export restrictions impact global supply chains and India’s strategic response.