India Negotiating Trade Pacts With Chile, Peru and Australia
The move of the government comes after several sectors in the industry complained about the shortage of rare earth minerals, mostly the automobile sector. As China is the major player of these minerals in the world, it has imposed restrictions on the supply, which is disrupting the supply chains worldwide
New Delhi: Amid restrictions on the supply of rare earth minerals from China, commerce and industry minister Piyush Goyal on Friday said the government is planning to take several steps to counter such problems and help avail sufficient rare earth minerals in the country.
“They included negotiating trade pacts with Chile, Peru and Australia for promoting domestic exploration, and engaging start-ups in recycling and processing as these countries have reserves of these minerals,” the minister said at an event here.
Critical or rare earth minerals such as copper, lithium, nickel, and cobalt are essential raw materials which have applications in various industries ranging from electronic goods to fighter jets. These minerals also fuel the growth of rapidly growing clean energy technologies, including electric vehicles and battery manufacturing.
The move of the government comes after several sectors in the industry complained about the shortage of rare earth minerals, mostly the automobile sector. As China is the major player of these minerals in the world, it has imposed restrictions on the supply, which is disrupting the supply chains worldwide.
India has already implemented a trade pact with Australia and is negotiating with South American nations Chile and Peru. The Indian team is visiting the two South American countries 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 the government is taking to deal with the shortage of these minerals.
“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.
The minister also suggested that the industry diversify their supply chains, as dependency on one country for the import of any product will create problems. “We must assess all our respective supply chains, see whether they are overly dependent on any particular geography,” he said, adding that if it is dependent on one country, you are prone to vulnerability, particularly in a world where trade is being used as a weapon.
Encouraging industry, he also said that the government is mostly focusing on manufacturing and high-tech sectors, which require longer-term funding. “We have seen weaponization 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.
He also said that the government is formulating guidelines for the newly announced Rs 10,000 crore fund of funds scheme or FFS for startups, unveiled in the Budget. “While these countries can increase their exports to India, domestic exporters are finding it difficult to enter their markets,” the minister said.