New Delhi [India], June 9 (ANI): India and Central Asian countries have expressed interest in joint exploration of rare earth and critical minerals at the recently held India-Central Asia Dialogue.

The renewed expression of interest in collaboration in rare earths and critical minerals comes as China has restricted its exports of some key industrial inputs.

According to a joint statement by India and Central Asian countries -- Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and, Uzbekistan -they appreciated the outcomes of the first India-Central Asia Rare Earth Forum held in September 2024 in New Delhi, as they called upon the relevant authorities to hold the second India-Central Asia Rare Earth Forum meeting at the earliest convenience.

The foreign ministers of these countries, including India, also encouraged the exchange of delegations to explore new areas of cooperation in critical minerals.

China produces around 90 per cent of the world's rare earths and only a few alternatives exist.

The EV companies of India is already facing heat with China's supply restrictions on the rare earth metals, according to a report by Jefferies.

A recent Jefferies report highlighted that several Indian companies are struggling to import magnets from China, which are crucial components in the production of EV motors.

The report warned that once the current stock of these magnets runs out, motor production could be severely affected, putting the entire supply chain at risk.

The Federation of Automobile Dealers Association (FADA), too, has echoed the sentiment. In its monthly vehicle data released on Friday, the FADA said, 'Global supply-chain headwinds (rare-earth constraints in EV components, geopolitical tensions) may limit urban consumer sentiment and exert cost pressure.'

On April 4, China imposed export controls on six heavy rare earth elements (REEs) and rare earth magnets. The country cited reasons such as national security and international obligations such as non-proliferation.

Although these curbs do not completely ban auto sector exports, companies must now seek prior government approval before shipping these materials out of China. This adds uncertainty and delay to the supply process.

According to a recent Reuters report, India is discussing with various companies to build long-term stockpiles of rare earth magnets. As part of this plan, the Indian government is likely to offer fiscal incentives to promote domestic production of these crucial components. (ANI)