India–China Tensions: Will Rare Earth Talks Break the Deadlock? All Eyes on Wang–Jaishankar Meet

National News: India and China may be signaling warmth in diplomatic engagement, but the real test of relations lies in the economic arena. Despite positive noises from Beijing on improving ties, China has so far refused to reopen the supply of rare earth magnets and other rare metals, which are crucial to India’s automobile and manufacturing sectors.

The issue has become particularly pressing as Prime Minister Narendra Modi prepares for his upcoming visit to China. Ahead of the visit, all eyes are on the bilateral meeting scheduled for Monday evening between External Affairs Minister S. Jaishankar and his Chinese counterpart, Wang Yi. Officials confirm that, besides discussions on Modi’s visit, trade relations and rare earth supply will be among the most important items on the agenda.

China’s Rigid Conditions

Diplomatic sources reveal that Beijing has adopted a rigid stand on the matter. It insists that rare earth exports will only be allowed to companies in countries that sign a specific agreement ensuring the metals are not diverted for military use. According to China, this condition is non-negotiable, as the government is determined to avoid any possibility of misuse.

In April 2025, China announced a complete ban on the export of rare earth magnets, citing fears that these could be deployed in defense technology. The ban came as a shock to India’s automobile sector, which relies heavily on such metals for electric vehicles, hybrid technologies, and other advanced machinery.

Impact on Indian Industry

The sudden stoppage of supplies has left Indian automobile companies scrambling. While some firms have managed to source limited quantities from Japan and other nations, the supply is far from sufficient to meet domestic demand. The scarcity has already started impacting production schedules and is expected to have a knock-on effect on prices of automobiles, particularly electric vehicles.

Industry representatives have been urging the government to resolve the issue at the highest diplomatic level. The matter has also been raised repeatedly by the Indian Ambassador in Beijing, but so far China has shown no flexibility.

A Key Test in Bilateral Talks

The rare earth issue is set to test the sincerity of China’s diplomatic overtures. While Beijing has expressed interest in improving ties with New Delhi in recent months, its unwillingness to address India’s economic concerns raises doubts about the depth of that commitment.

For India, the stakes are high. Securing access to rare earths is not only about meeting current industrial demand but also about supporting the country’s long-term electric mobility goals. The outcome of the Jaishankar–Wang Yi meeting, therefore, could set the tone for Modi’s China visit and shape the future trajectory of India–China economic relations.