'Wake-up call': Piyush Goyal says India is building alternative supply chain for rare earth amid China's curbs

Commerce and Industry Minister Piyush Goyal on Monday said China's ban on the export of rare earth is a global "wake-up call".

China's export ban on rare earth a wake-up call, says Piyush Goyal

"This situation serves as a wake-up call for all those who have become over-reliant on certain geographies. It's a wake-up call for the whole world that you need trusted partners in your supply chain,"  Goyal said.

He also mentioned that India is actively building alternative supply chains while positioning itself as a trusted partner for international businesses to reduce dependence on Chinese suppliers.

Speaking to the press during his official visit to Switzerland, Goyal acknowledged that China's export curbs will cause short-term challenges for India's automotive and white goods sectors.

"There are clearly issues around the suspension of permanent magnet supplies from China to India, which will particularly affect our auto sector and several white goods manufacturers. Some companies have submitted their applications, and we hope that pragmatic considerations will prevail and they will receive the necessary approvals," he added.

However, the Minister said that new long-term opportunities will be created after collaborative efforts between the government, industry, and innovators.

New technology, strategies in place

"There are some technologies that India is developing. We are all working as a team and remain confident that while there may be challenges in the short run, we will emerge as winners in the medium to long term," Goyal shared.

He also mentioned that companies can handle these challenges via partnerships with domestic innovators and startups.

"They are actively engaging with our innovators and startups, indicating they will provide any necessary funding or pricing adjustments to encourage faster rollout and growth of this sector," the minister said.

"More and more Indian industry is coming out of the old mindset that government subsidies and support alone will run our operations. They are becoming bigger and bolder in their approach," Goyal added.

Meanwhile, the automotive industry has requested the government to accelerate the approval process required for importing rare earth magnets from China, which are essential in passenger vehicles and various automotive applications.

"More and more companies, businesses, and people in India will recognise that it is important to be self-reliant and to have trusted partners in supply chains, Goyal said. "Increasingly, the world today wants India to be part of their supply chain because we are seen as a trusted partner."

China has control over 90 per cent of the world's magnet production capacity, which has eventually raised concerns for industries across the world as they are critical across multiple industries.

Also read: “A problem of political economy, not tech”: Sridhar Vembu says Govt should break monopolies to lower costs of AI-made products (startuppedia.in)