Modi’s August 31 meeting with Xi could shape India’s rare earth supply outlook, with implications for electronics and EV makers.
Prime Minister Narendra Modi’s scheduled meeting with Chinese President Xi Jinping this upcoming weekend is expected to draw attention to India’s rare earth supply challenges. The talks come as China’s export curbs on heavy rare earth magnets have left more than 50 Indian import applications pending, with no shipments since April. Beijing currently controls 90% of global rare earth processing, giving it significant leverage over critical supply chains.
The disruption has already influenced Indian automakers, who are adjusting designs to reduce reliance on heavy rare earths. Many are shifting towards motors using light rare earth (LRE) or ferrite-based magnets, though these substitutes are not always suitable for larger applications. Festive season production plans for cars and two-wheelers have been delayed, with some companies even resorting to discreet imports to cover shortages.
In July, shipments of lighter-grade magnets surged after customs bottlenecks eased, offering temporary relief. However, the absence of heavy rare earths remains a pressing concern for India’s ambitions in electric vehicles, renewable energy, and defence electronics.
The Modi–Xi meeting is seen as an opportunity to bring the issue directly into leader-level discussions. Earlier, China assured India of supplies of fertiliser and tunnel boring machines, but rare earths were not included in official statements following recent diplomatic visits.
Industry leaders are signalling the importance of diversification. “We are scouting for alternative sources of rare earths outside China in case there is further action from the Chinese government,” said Rakesh Sharma, Executive Director, Bajaj Auto. He noted that the company is also working on magnets that do not require rare earths at all.
The outcome of the August 31 meeting may indicate whether bilateral engagement can ease supply pressures while India continues exploring long-term domestic production options.
