The government is currently focused on taking measures to improve the supply of critical rare earth minerals, which include exploring domestic production and negotiating with countries rich in rare earths to expedite imports, said Union Minister of Commerce and Industry, Piyush Goyal, on Friday.
Speaking at an ASSOCHAM event, the minister said India’s current dialogue with various countries on securing free trade agreements (FTAs) with them is not only to increase exports, but also ensure an uninterrupted supply of rare earth minerals, which have been in shortage since China imposed restrictions on the supply, thereby disrupting supply chains worldwide.
China controls more than 90 per cent of the world’s magnet production and 60 per cent rare earth mining.
Goyal said India has already implemented a trade pact with Australia, and is negotiating with South American nations Chile and Peru, where an Indian delegation will head for the next round of trade talks.
“Look at Chile and Peru, think about it. Why am I doing FTA with them in the first place? It gives you the answer," he said when asked about steps taken by the government to deal with the shortage of these minerals.
Also Read: India’s trade talks with Chile, Peru to proceed in Oct, Nov
Critical or rare earth minerals include copper, lithium, nickel, and cobalt, used in industries ranging from electronic goods to fighter jets.
These minerals are also in demand for the rapidly growing clean energy technologies, including electric vehicles and battery manufacturing.
Countries like Chile, Peru and Australia have reserves of these minerals.
Goyal also said the government is encouraging start-ups that can explore minerals’ extraction and processing.
“In our country, we are looking at increasing explorations and I have been talking to start-ups engaged in this area both for recycling of the waste, from which we can extract rare earths, and we are also in dialogue with start-ups to see if we can create the processing facility in India, which is currently concentrated in one geography,” Goyal said.
To fight the “weaponisation of trade and supply chains”, the minister suggested reducing dependence on “any particular geography”.
"We have seen weaponisation of trade and supply chains. Make your supply chains robust, wherever possible, be self-sufficient and self-reliant. Make sure we have a sufficient number of options so that we are not vulnerable," he added.
Goyal also said the government is formulating guidelines for the newly announced ₹10,000 crore Fund of Funds Scheme (FFS) for startups, which was unveiled in the Budget, and focusing on manufacturing and high-technology sectors, which require longer-term funding.
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