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

Piyush Goyal

Union Commerce and Industry Minister Piyush Goyal said that India is actively developing alternative supply chains, positioning itself as a reliable partner for international businesses looking to reduce their reliance on Chinese suppliers.

The minister described China 's ban on export of rare earth as a "wake-up call" for the world and admitted that China's curbs will present short-term challenges for country's automobile industry & white good sectors.

"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.

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

Goyal also highlighted a detailed strategy to address the crisis, including diplomatic engagement via the Indian embassy's ongoing talks with Chinese authorities, along with his ministry's efforts to find out alternative supply sources.

He said ongoing technological developments can provide alternative solutions to reliance on Chinese rare earth.

"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," he said.

Additionally, Goyal said that companies have strong confidence to tackle 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," he added.

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

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