In a significant development for India, China has agreed to remove restrictions on the export of rare earth minerals, fertilisers, and tunnel boring machines. This decision came after a meeting between India’s External Affairs Minister S Jaishankar and his Chinese counterpart Wang Yi. The move addresses some of India’s key concerns regarding supply chain stability and trade barriers.
India relies heavily on China for rare earth minerals, with imports accounting for 80% to 85% of its needs over the past three years. These minerals are crucial for various high-tech industries, including electronics and defence. By lifting these curbs, China is expected to bring much-needed predictability to India’s supply chains.
The discussions also covered broader trade issues. Both India and China agreed to reopen border trade through designated points such as Lipulekh, Shipki La, and Nathu La. This step could strengthen economic ties between the two nations, which have seen tensions in recent years over territorial disputes and geopolitical differences.
Aside from trade, the meeting touched on sensitive political topics. Wang Yi brought up Taiwan, but Jaishankar reaffirmed India’s adherence to the One-China policy. However, he also clarified that India would continue engaging with Taiwan on economic and technological fronts, a stance shared by many countries. This balanced approach ensures India maintains its strategic interests while respecting diplomatic protocols.
Another critical issue raised by India was China’s construction of a mega dam on the Brahmaputra River (known as Yarlung Tsangpo in China). Lower riparian states, including India, are concerned about the dam’s downstream impact. While no immediate resolution was announced, bringing up the matter underlines India’s proactive stance on transboundary water disputes.
Trade restrictions have been a recurring point of discussion between the two nations. Earlier this year, China imposed export controls on rare earth items, causing disruptions. India has since intensified efforts to reduce dependency, including setting up the National Critical Mineral Mission to boost domestic production. However, the latest agreement suggests a temporary easing of pressure on Indian industries.
Fertiliser supplies were another key focus. China is a major exporter of DAP, a crucial fertiliser for Indian agriculture. With long-term agreements now in place with Saudi suppliers, India is diversifying its sources. Yet, China’s cooperation remains vital to stabilising global fertiliser markets.
China’s foreign ministry did not explicitly confirm any policy changes but emphasised Beijing’s willingness to collaborate globally to maintain stable supply chains. Wang Yi also highlighted challenges posed by unilateralism and trade disruptions, a sentiment echoed by Jaishankar, who stressed the importance of a stable global economy.
The dialogue marks a cautious yet positive step in India-China relations, balancing economic cooperation with geopolitical realities. While uncertainties remain, the removal of trade barriers could help both nations navigate complex global supply chain dynamics.