[Text/Watchman Network Ruan Jiaqi]
Following the strict control on exports of gallium, germanium, antimony, superhard materials, graphite and other dual-use items to the United States last year, China has implemented export control measures for seven categories of medium and heavy rare earth related items since April this year. According to foreign media reports, in order to track the entire production chain, China is establishing a rare earth export licensing system.
The Nikkei Asia reported on May 5 that as rare earth reserves are about to run out, Indian automobile manufacturers are feeling increasing pressure from export controls, worrying that production lines will soon come to a standstill.
A Japanese media outlet cited a senior executive in the Indian industry as saying, "Suppliers usually have inventory for 3 to 6 weeks, and in some cases even longer. It goes without saying that the inventory will soon be depleted."
This person mentioned China's export license, "This means we must complete a long list of paperwork, and the entire process will be very time-consuming."
According to Japanese media reports, India's importers' customs clearance applications must first be approved by the Directorate General of Foreign Trade in India, then submitted to the Ministry of Foreign Affairs, subsequently sent to the Chinese Embassy in Delhi, then delivered to the Chinese supplier, and finally reviewed by the Ministry of Commerce of China. The aforementioned executive said that currently there are more than 20 applications pending approval in India.
Another senior executive in the Indian industry also revealed that the urgency for China's approval is prompting the Indian government to take action. According to him, "The Ministry of Heavy Industry, the Ministry of Commerce, and the Ministry of Foreign Affairs all support this matter, which has been reported to the highest levels, and the Prime Minister's Office is continuously following up."
The Nikkei Asia report also mentioned that the Indian Embassy in Beijing is also coordinating the arrangement of meetings between delegations of Indian automobile and parts manufacturers and the Ministry of Commerce of China, with a specific date yet to be determined.
On September 14, 2023, in Gurgaon, India, Shailesh Chandra, Executive Director of Tata Motors, attended the launch event of the new Nexon EV electric vehicle model. Visual China.
According to global automobile production data in 2024, India is the fourth largest automobile producing country after China (31.28 million), the United States (10.56 million), and Japan (8.23 million). After China tightened its export control measures on rare earths, Indian automobile production faced challenges in the supply chain.
According to an earlier report by the Hong Kong-based South China Morning Post, as a global leader in electric vehicle components and rare earth processing, China's export controls are causing new uncertainties for India's rapidly growing electric vehicle industry.
Reports indicate that last year, India's electric vehicle sales exceeded 1.9 million units (accounting for 3.6% of total domestic automobile sales, note: India's automobile sales include two-wheelers, three-wheelers, etc.), but almost all models depend on imported components from China. In 2024 alone, India imported approximately $7 billion worth of electric vehicle batteries and magnets from China.
The report points out that despite having about 6.9 million tons of rare earth reserves, due to underdeveloped domestic mining and processing capabilities, India's electric vehicle production still relies on imports from China and benefits from China's advanced refining facilities and efficient supply chain systems in key raw material areas.
However, some analysts are concerned that this reveals the severe degree of India's dependence on China's supply chains. If it cannot achieve strategic investment and transition towards self-reliance, this country may fall behind in the clean energy revolution.
Saket Mehra, partner and head of the automotive industry at market research firm Grant Thornton Bharat, said, "China's export restrictions on rare earth minerals, especially those used in electric vehicle motors, directly result in impacts such as production delays due to shortages of key electric vehicle motor components, rising raw material costs, and slowing technological advancements in advanced electric vehicle motor research and development."
He also mentioned that in 2023, China processed more than 200,000 tons of rare earths, while India's state-owned rare earth enterprise IREL processes only about 10,000 tons annually, highlighting the urgent need for India to modernize its refining capabilities.
Reports suggest that although China's rare earth export controls are not specifically targeted at India, their "chain reaction" does affect the supply chains of key electric vehicle components. Some analysts believe that India must act quickly to mitigate the impact. Others argue that India must move beyond "import mentality" to ensure the future of its domestic electric vehicle ecosystem.
Meanwhile, the impact of China's rare earth export controls is rapidly manifesting elsewhere.
Reuters reported that from Tokyo to Washington, China's export controls have caused strong tremors among corporate boards and governments in various countries, with officials urgently seeking limited alternative solutions, fearing that production of new vehicles and other products may stall before the end of summer. Diplomats, automobile manufacturers, and other industry executives from India, Japan, and Europe are urgently seeking meetings with Chinese officials to push for faster approval of rare earth magnets exports.
British media reported on April 4, citing three sources, that China has introduced a tracking system for the rare earth magnet industry, which took effect last week—requiring producers to submit additional information online, including transaction volume and customer names.
The report suggests that this additional review indicates that China's export controls on rare earths and related magnets may become long-term policies. A knowledgeable source stated that the long-term goal of the Chinese government is to track the entire rare earth production chain, not just rare earth magnets, to strengthen industry regulation, combat smuggling, illegal mining, and tax evasion.
In response to the rare earth export controls, Foreign Ministry Spokesperson Lin Jian stated at a regular press conference on June 5 that China's export control measures comply with international practices, are non-discriminatory, and are not aimed at specific countries.
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Original text: https://www.toutiao.com/article/7512668543080366611/
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