India is reconsidering its long-standing rare-earth export agreement with Japan as part of a broader strategy to secure critical minerals for domestic industries. The move comes in response to China’s tightening control over rare-earth supplies, which has disrupted global markets and heightened concerns over supply chain vulnerabilities.
Rare-earth elements, particularly neodymium, are essential for manufacturing high-performance magnets used in electric vehicles, wind turbines, and advanced electronics. India has been exporting rare-earth materials to Japan under a bilateral agreement since 2012, with state-run miner IREL (India) Limited supplying Toyotsu Rare Earths India, a subsidiary of Toyota Tsusho.
However, with China imposing export restrictions on rare-earth magnets since April 2025, global manufacturers—including Indian automakers—have faced severe shortages. India, which imports over 80% of its rare-earth magnets from China, is now looking to develop its own processing capabilities to reduce dependence on foreign suppliers.
Commerce Minister Piyush Goyal recently directed IREL to halt rare-earth exports to Japan and prioritize domestic supply needs. The government is exploring ways to expand domestic rare-earth processing and establish magnet production facilities to support industries such as automotive, defense, and renewable energy.
IREL has historically exported rare-earths due to India’s limited processing capacity. However, with China’s restrictions causing global disruptions, India is now focusing on retaining its rare-earth reserves and developing local infrastructure for refining and magnet production.
