Rare earth supply crunch: China's export ban impacts EV industry, India seeks new partners

China’s export restrictions on key rare earth magnets have led to supply chain bottlenecks affecting domestic industries, including electric vehicle (EV) manufacturers, the government told Parliament on Tuesday.



In a written reply to the Lok Sabha, Minister of State for Commerce and Industry Jitin Prasada said regular consultations are being held with stakeholders to address the disruptions caused by China’s move, PTI reported.



He said the Ministry of Mines is working to strengthen supply chain resilience for critical minerals , including rare earth elements that are vital for producing magnets used across sectors such as EVs.



To diversify sourcing, India has signed bilateral agreements with countries rich in mineral resources such as Australia, Argentina, Zambia, Peru, Zimbabwe, Mozambique, Malawi and Côte d’Ivoire, as well as with international bodies like the International Energy Agency (IEA).



“The recent imposition of export restrictions on key rare earth magnets by China has resulted in a supply chain bottleneck, impacting the Indian industries including electric vehicle manufacturers,” Prasada said.



Khanij Bidesh India Limited (KABIL), a joint venture tasked with acquiring overseas mineral assets of strategic importance, is also working with global organisations to secure alternative supply channels, he added.