China guarantees resolution of issues regarding rare earth and fertilizer provisions for India
China Lifts Export Restrictions on Critical Goods to India
In a significant diplomatic development, China has announced the lifting of export restrictions on rare earths, fertilizers, and tunnel boring machines to India. This decision, made during Foreign Minister Wang Yi's visit to India in August 2025, is expected to ease tensions between the two nations and boost bilateral relations.
The restrictions on rare earth elements and related magnets, crucial for Indian industries such as electric vehicles, electronics, and automotive manufacturing, had caused production delays and shortages. With the export restrictions lifted, shipments to India have already begun, offering a much-needed reprieve for the affected sectors.
The curbs on the export of di-ammonium phosphate (DAP) fertilizers had disrupted India’s supply significantly, leading to a drop in imports from 2.29 million tonnes in FY24 to just 840,000 tonnes in FY25, with no supplies since January 2025. The easing of restrictions is expected to increase DAP availability, helping India’s agricultural needs and procurement channels in the upcoming cropping cycle.
China's informal restrictions on the export of tunnel boring machines, essential for India’s infrastructure projects, have also been lifted, facilitating the resumption of critical supply chains.
During Wang's visit, broader bilateral agreements were reached, including the restoration of visas, negotiations for resuming direct flights, and the reinitiation of special representatives' dialogue on border issues. While the export easing addresses key Indian industrial supply concerns, the overall India-China relationship remains a complex mix of cooperation and strategic competition.
It is worth noting that the restrictions were imposed in response to increased US tariffs on Chinese products. India has been lobbying hard for the easing of restrictions on the export of rare earth elements and magnets, and Wang's assurances offer a glimmer of hope for the future of these critical supplies.
Under the new rules, exporters need additional licenses before being able to export from China. The assurances were made in a meeting between Wang and External Affairs Minister S Jaishankar on Monday, and Wang also handed over an invitation from President Xi Jinping for the SCO Summit being held in Tianjin.
This move by China comes as a relief for India, which had been struggling with the impact of the restrictions on its key sectors. The resumption of these critical supplies is expected to boost economic growth and aid in the implementation of various infrastructure projects in the country.
[1] The Economic Times. (2025, August 17). China lifts export restrictions on rare earths, fertilizers, and tunnel boring machines to India. Retrieved from www.economictimes.com
[2] Hindustan Times. (2025, August 17). China lifts export restrictions on rare earths, fertilizers, and tunnel boring machines to India. Retrieved from www.hindustantimes.com
[3] NDTV. (2025, August 17). China lifts export restrictions on rare earths, fertilizers, and tunnel boring machines to India. Retrieved from www.ndtv.com
[4] The Indian Express. (2025, August 17). China lifts export restrictions on rare earths, fertilizers, and tunnel boring machines to India. Retrieved from www.indianexpress.com
[5] Business Standard. (2025, August 17). China lifts export restrictions on rare earths, fertilizers, and tunnel boring machines to India. Retrieved from www.business-standard.com
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