Latest Sectors News
Businesses welcome the pact but seek clarity on implementation details and regulations. Technical standards and rules of origin require further guidance for effective trade. Medical device exporters express cautious optimism and need policy safeguards. The agreement aims to boost exports and integrate India into global value chains. View More
As the India-UK Free Trade Agreement ( FTA ) came into force on Wednesday, industry stakeholders welcomed it but said its long-term success would ultimately depend on the effective resolution of implementation challenges, particularly those involving technical standards, rules of origin, and sanitary regulations. The India-UK Comprehensive Economic and Trade Agreement (CETA) is expected to eliminate tariffs on 99% of tariff lines, improve market access across goods and services, and strengthen investment and supply chain partnerships between the two countries. India-UK bilateral trade in goods an services stands at about $55-60 billion, with both sides targeting $100 billion by 2030. Prime Minister Narendra Modi described the India-UK CETA as “a historic milestone” in bilateral relations, saying it would significantly boost trade and investment between the two countries. In a post on social media platform X, Modi said the agreement would unlock new opportunities for Indian farmers, workers, MSMEs, start-ups and innovators, while contributing meaningfully to the realisation of the Viksit Bharat 2047 vision. The Compound Livestock Feed Manufacturers Association (CLFMA) of India said while the agreement provides a strong framework for expanding bilateral trade, businesses require greater clarity on implementation, especially in the agriculture and livestock sectors. “The agreement provides the framework, but many technical import conditions will continue to be governed by domestic regulations and competent authorities,” said Divya Kumar Gulati, Chairman of CLFMA of India. Live Events He said exporters need detailed operational guidance on product-specific import requirements, veterinary health certificates, certification procedures, inspection protocols, and equivalence arrangements for animal and livestock products. According to Gulati, such clarity would be essential for enabling commercial exports of dairy, meat, poultry, and other livestock products while ensuring compliance with the UK’s stringent food safety and animal health regulations. The industry body also highlighted Rules of Origin (RoO) as another area requiring greater clarity. Gulati added that businesses need sector-specific guidance on value-addition thresholds, documentation requirements, certification processes, cumulation provisions and compliance procedures, particularly for processed food, animal feed, veterinary products and other value-added agricultural exports. Clear implementation guidance, he said, would help businesses fully utilise the agreement’s preferential tariffs while minimising compliance risks. Despite these concerns, CLFMA said the agreement establishes a stronger platform for regulatory cooperation, enabling smoother trade in animal health products, feed ingredients, genetics, and livestock technologies. The association said India is expected to benefit from greater access to advanced UK expertise in animal breeding, veterinary pharmaceuticals, feed additives, precision livestock farming, disease surveillance, cold chain infrastructure, and sustainable livestock production systems. It added that farmers, fisherfolk, MSMEs, and food-processing industries are expected to gain improved access to premium UK markets under the agreement. CLFMA said reduced trade barriers and improved market certainty are expected to encourage long-term commercial partnerships, research collaborations and investment in livestock innovation. It added that the agreement’s emphasis on internationally recognised food safety, animal health and quality standards would help strengthen resilient agri-food supply chains between India and the UK while accelerating technology exchange and creating long-term value for producers, processors and agribusinesses in both countries. The All India Medical Device Association (AiMeD) lauded the CETA with “cautious optimism”. “We welcome it with cautious optimism. It offers opportunities for Indian medical device exports to grow, but we remain concerned about the risk of third-country manufacturers routing competitive imports via the UK under reduced duty access. Indian industry can compete fairly with British devices, yet our nascent medical devices sector, already import-dependent, needs policy safeguards to prevent circumvention and ensure Make in India gains are not undermined,” said Rajiv Nath, Forum Coordinator, AiMeD. He added that India’s medical device imports from across the world rose 17% last year to Rs 89,000 crore from Rs 77,000 crore. India’s medical device exports to the UK currently remain stagnant at around $130 million, while imports from the UK stand at $227 million, he said. Ashok Rajani, Managing Director and Partner at BCG, said the agreement marks a significant milestone for India’s export sector but stressed that the next phase would be about converting preferential access into long-term manufacturing competitiveness. “CETA marks a defining moment in India’s export journey. More importantly, it shifts the conversation from preferential access on paper to preferential access in practice,” he said. “We are already seeing early signs of this momentum, with textile and garment orders from the UK up 12% year-on-year, leather goods and footwear orders up 20%, and the gems and jewellery industry targeting exports of around $2.5 billion over the coming years. As tariffs ease across sectors such as textiles, leather, chemicals and pharmaceuticals, the real opportunity now lies in converting this early momentum into durable manufacturing capacity, particularly by helping MSME exporters build capabilities around compliance, standards, and traceability. If implemented well, CETA can become a template for how India scales both manufacturing and services exports while integrating more deeply into global value chains,” Rajani added. Independent trade expert Manasvi Srivastava called the agreement a “win-win” on the goods front, with Indian exports such as garments, leather goods, jewellery, shrimps, and auto parts expected to benefit from preferential market access. He noted that in several of these sectors, India would now get a level playing field with competing developing countries. He said one of the biggest gains under the agreement lies in services. “A very significant benefit for India is enhanced market access to the services sector, wherein CETA provides for institutionalisation of national treatment (non-discrimination from domestic service providers) to many sub-sectors. In the case of services, the exemption for temporary workers from compulsory payment into social security contributions is also a big win for India under CETA,” Srivastava said. However, he said FTA’s implementation would remain crucial. “Perhaps greater focus on technical barriers like certifications, standards, quality control orders (QCOs) and mutual recognition agreements would help. This is an area that, if left unaddressed, can significantly reduce the market access promised by CETA.” Srivastava also suggested introducing a direct reference to the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR), saying it would generate greater confidence in implementing the agreement “in letter and spirit”. “As FTAs do not have penal enforcement mechanisms (unlike a rules-based multilateral trading system), they are only as effective as the national officials want them to be. Hence creating clarity and predictability on these two aspects would help,” he said. Nirmal K. Minda, President of industry body ASSOCHAM, said the agreement is expected to unlock significant opportunities for businesses in both countries. “India-UK trade will expand in a steady mode as this FTA ensures tariff elimination for 99% tariff lines and covers nearly 100% of trade value, including textiles, leather, marine products, gems and jewellery, toys, engineering goods, chemicals and auto components. It has overcome disagreements related to British trade restrictions on steel and unlocked tariff-free access for India’s steel exports,” Minda said. He, however, pointed to India’s historically low utilisation of free trade agreements as a concern. “The only concern is the low utilisation rate of India’s FTAs so far. However, with respect to this agreement, we have noted that the government has indicated deployment of 1,000 advisory personnel across India to help businesses maximise India-UK CETA, and our Commerce Minister has recently released the UK-India CETA Business Utilisation Manual, which is a practical activation guide for Indian and UK businesses.” .Pbanner{display:flex;justify-content:space-between;align-items:center;background-color:#ec1c40;margin-top:20px;padding:5px 10px;border-radius:4px;color:#fff;line-height:10px;width: 100%;box-sizing: border-box} .Pbannertext{display:flex;align-items:center;font-size:16px;font-weight:600;font-family:'Montserrat';} .Pbannertext img{height:20px;margin:0 6px} .Pbannerbutton a{display:flex;align-items:center;background-color:#fff;color:#ec1c40;text-decoration:none;font-weight:600;padding:4px 8px;border-radius:6px;font-size:15px;font-family:'Montserrat';} .Pbannerbutton img{height:20px;margin-right:6px} .Pbannerbutton a:hover{background-color:#f7f7f7} Add as a Reliable and Trusted News Source Add Now!
Tariff concessions alone will not secure India’s long-term economic success; strengthening manufacturing competitiveness is the key, says Ajay Srivastava. View More
India is negotiating some of its most ambitious trade agreements in recent history. With negotiations underway or deals concluded with the US, UK, the European Union (EU), and New Zealand, preferential trade arrangements could soon cover more than 60% of the country’s exports. The key question, however, is whether these agreements will strengthen India’s long-term economic competitiveness or expose its underlying structural weaknesses. Ajay Srivastava , Founder of the Global Trade Research Initiative (GTRI), argues that while free trade agreements (FTAs) can enable market access, they are no substitute for a strong manufacturing base. He says India must shift its focus from tariff negotiations to improving domestic competitiveness if the country wants to fully benefit from these trade deals. He disputes the popular narrative that globalisation is ending. Srivastava, a former Indian Trade Service officer who was part of India’s WTO and FTA negotiating teams, argues that free trade is not disappearing, rather, major economies are increasingly embracing protectionist policies and industrial strategies to safeguard their own economic interests. “More than 80% of global trade still takes place under established international trade rules.” he says. However, he argues that the world’s largest economies, the US, EU, and China, are increasingly embracing industrial policy and protectionism. “The concern is not that free trade has ended. The concern is that the biggest economies are becoming more protectionist, and that creates challenges for countries like India.” India must strengthen manufacturing Live Events India, Srivastava argues, can achieve far more if manufacturing receives greater policy attention. “If we focus much more on manufacturing, our exports will increase. The government is taking the right steps, but the pace must accelerate.” According to him, exports are ultimately a reflection of manufacturing capability, not merely trade agreements. One of the biggest concerns is India’s widening trade deficit with many FTA partners, he says, pointing out that India’s imports from countries, such as Japan and South Korea, have increased far more quickly than exports since the agreements came into force. Similarly, imports from newer FTA partners, including Australia, the United Arab Emirates (UAE), and Switzerland, are also rising at nearly twice the pace of exports. The structural reason, he explains, is simple. “Most developed economies already maintain very low import tariffs. Therefore, India gains little additional market access when tariffs fall further. India, however, maintains relatively higher tariffs.” “When India cuts tariffs under an FTA, partner countries receive a significant price advantage in the Indian market, whereas Indian exporters receive only limited additional benefit because tariffs abroad were already low.” India-US trade deal: What’'s the incentive? Discussing the proposed India-US trade agreement, Srivastava says the negotiations face a fundamental challenge. The joint statement issued earlier this year was built around the assumption that the US would reduce reciprocal tariffs in return for Indian concessions. However, after US courts questioned the legality of those reciprocal tariffs, he believes the negotiating landscape changed dramatically. “If the US is no longer in a position to offer tariff concessions, the obvious question becomes: what exactly is India receiving in return?” He believes this uncertainty explains why negotiations have slowed. Agriculture: India’s biggest red line Agriculture continues to be among the most sensitive issues in India-US negotiations. According to Srivastava, opening India’s farm sector involves much more than lowering tariffs. He argues that American concerns extend to India’s minimum support price (MSP) system and broader agricultural policies. “Agriculture is the livelihood of nearly half of India’s population. This is not merely a trade issue.” He warns that heavily subsidised American agriculture could destabilise India's food security if market access is opened without safeguards. Drawing from history, he recalls that India once agreed under international pressure to bind tariffs on wheat and rice at zero during the General Agreement on Tariffs and Trade (GATT) era. After the Green Revolution transformed India into a food-surplus nation, New Delhi had to renegotiate those commitments at significant cost. “It’s a lesson India cannot afford to forget.” Beyond trade, Srivastava argues that India’s foreign policy should remain independent. The US remains an important strategic partner, he says, but India should simultaneously maintain strong engagement with Europe, Russia, Gulf countries, and China wherever national interests align. “We should have balanced relations with everyone without compromising India's sovereign interests.” China’s rise has changed America’s Asia strategy According to Srivastava, one of the biggest geopolitical shifts underway is America’s reassessment of its China strategy. Earlier initiatives, such as the Indo-Pacific framework, supply-chain resilience, and China-plus-one, were designed to reduce dependence on China. However, he believes those efforts have delivered only limited success because global manufacturing remains deeply integrated with Chinese supply chains. “China still dominates processing of critical minerals, electronics, solar components, and several manufacturing ecosystems.”" As a result, many products exported from countries such as Vietnam still contain substantial Chinese inputs. India-UK FTA: Opportunity with limitations Srivastava believes the India-UK agreement will benefit sectors such as garments, engineering goods, and gems. However, tariff reductions alone will not guarantee export growth. British consumers demand high product quality, certifications, and strict regulatory compliance. “Indian MSMEs will need substantial investment in quality standards if they wish to compete successfully.” He cites India’s experience with Japan, where zero-duty access for garments failed to translate into significant export gains because Indian manufacturers struggled to meet Japanese quality requirements. CBAM: A growing concern The EU’s Carbon Border Adjustment Mechanism (CBAM), particularly for steel and other carbon-intensive sectors, remains another major challenge. Even as tariffs under an India-EU FTA may eventually decline, Indian exporters could still face significant carbon-related taxes. “This creates a situation where tariff concessions are offset by climate-related trade barriers.” He believes India may eventually need calibrated countermeasures if such barriers substantially affect exports. Vietnam’s success can’t simply be replicated Vietnam is often cited as a model for export-led manufacturing. Srivastava agrees that Vietnam has successfully attracted multinational investment but notes that its strategy differs fundamentally from India’s. Vietnam has offered extensive market access and investment flexibility to foreign companies. However, he argues that such an approach may be less suitable for a large economy like India. “Large economies such as India, China, and the US cannot simply copy the model of smaller export-dependent economies.” China’s manufacturing lesson Asked where India stands compared with China, Srivastava’s assessment is candid. China, he says, invested relentlessly in manufacturing capacity over several decades. India, by contrast, liberalised its economy but did not build comparable manufacturing depth. His recommendation is highly specific. Rather than discussing manufacturing only in broad policy terms, India should identify thousands of individual products currently imported, particularly from China, and systematically develop domestic production capabilities. “We should become a product-nation.” The road ahead Srivastava believes FTAs remain important instruments of economic diplomacy, but they cannot substitute for domestic competitiveness. Without stronger manufacturing, better product quality, deeper supply chains, and greater industrial capability, India may continue to witness imports growing faster than exports—even under preferential trade agreements. “Manufacturing is India’s real long-term strategy. Trade agreements can help, but they cannot replace competitiveness,” concludes Srivastava. .Pbanner{display:flex;justify-content:space-between;align-items:center;background-color:#ec1c40;margin-top:20px;padding:5px 10px;border-radius:4px;color:#fff;line-height:10px;width: 100%;box-sizing: border-box} .Pbannertext{display:flex;align-items:center;font-size:16px;font-weight:600;font-family:'Montserrat';} .Pbannertext img{height:20px;margin:0 6px} .Pbannerbutton a{display:flex;align-items:center;background-color:#fff;color:#ec1c40;text-decoration:none;font-weight:600;padding:4px 8px;border-radius:6px;font-size:15px;font-family:'Montserrat';} .Pbannerbutton img{height:20px;margin-right:6px} .Pbannerbutton a:hover{background-color:#f7f7f7} Add as a Reliable and Trusted News Source Add Now!
Indian exporters can now ship over eleven lakh tonnes of steel duty-free to the UK. This benefit comes into effect through a new free trade agreement implemented on Wednesday. The agreement resolves previous steel safeguard measures which had become a major sticking point. India has secured robust market access and continuity for its steel exporters. This development paves the way for enhanced bilateral trade in steel products. View More
Indian steel exporters will be able to ship more than 11 lakh tonnes of steel to the UK each year without paying import duty under the India-UK Comprehensive Economic and Trade Agreement (CETA), which came into effect on Wednesday, after New Delhi negotiated enhanced market access despite Britain's steel safeguard measures. The UK's steel safeguard regime, introduced in March, had emerged as one of the key hurdles to operationalising the trade pact signed on July 24, 2025. With both sides resolving the issue, the agreement has now been implemented from July 15. Also read: India-UK FTA explained: No new work visa, but these professionals benefit According to a government official, India secured duty-free access through a combination of country-specific quotas and the UK's Authorised Use Scheme (AUS), ensuring continuity of exports while expanding access across several product categories. A total of 188 steel products, representing exports worth USD 137 million to the UK, were covered under Britain's safeguard measures. India's overall steel exports to the UK stood at USD 960 million in 2025. To address concerns over the impact of the safeguards, India held extensive discussions with the UK and sought higher quota allocations after consultations with domestic stakeholders. Live Events "After prolonged and intense discussions at all levels between the two sides, India has been able to secure robust market access and continuity for Indian exporters," the official said. "As a result of these successful negotiations, India's total country-specific quota (CSQ) under the new framework stands elevated at 1,68,029 tonnes, seamlessly complemented by the exclusive 9.45 lakh tonnes under the Authorised Use Scheme (AUS)," the official added. As part of the revised arrangement, the UK has widened tariff-free access across several key steel categories. The country-specific quota for non-alloy and other alloy hot-rolled sheets and strips has increased to 33,456 tonnes from 12,405 tonnes. Also read: UK-India pact to shield working professionals from dual social security taxes India has also secured an exclusive 40% share of the quota available under the Authorised Use Scheme, equivalent to nearly 9.45 lakh tonnes of annual trade volume. In Category 28, covering non-alloy wire, the UK has removed nine commodity codes from the safeguard measures, allowing around 95% of India's exports in that category to continue without restrictions. The agreement also provides higher residual quotas in other segments. Under Category 12B, covering non-alloy merchant bars and light sections, the residual quota has been raised to 4,540 tonnes from 468 tonnes. For Category 26, covering other welded tubes, the quota has increased to 16,327 tonnes from 10,809 tonnes. (With inputs from PTI) .Pbanner{display:flex;justify-content:space-between;align-items:center;background-color:#ec1c40;margin-top:20px;padding:5px 10px;border-radius:4px;color:#fff;line-height:10px;width: 100%;box-sizing: border-box} .Pbannertext{display:flex;align-items:center;font-size:16px;font-weight:600;font-family:'Montserrat';} .Pbannertext img{height:20px;margin:0 6px} .Pbannerbutton a{display:flex;align-items:center;background-color:#fff;color:#ec1c40;text-decoration:none;font-weight:600;padding:4px 8px;border-radius:6px;font-size:15px;font-family:'Montserrat';} .Pbannerbutton img{height:20px;margin-right:6px} .Pbannerbutton a:hover{background-color:#f7f7f7} Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) (You can now subscribe to our Economic Times WhatsApp channel)
Commerce Secretary says New Delhi secured a higher quota than several other countries after fresh negotiations; discussions on CBAM still on View More
Vedanta plans to significantly increase zinc and lead production capacity by 2031. Aluminium production capacity will double over the next three years. The company targets iron and steel output expansion to fifteen million tonnes annually. Vedanta will invest five billion dollars in its oil and gas business. This expansion aims to meet rising domestic demand and strengthen global presence. View More
Oil-to-metals conglomerate Vedanta on Tuesday unveiled an ambitious expansion roadmap across its metals, mining and energy businesses, outlining plans to sharply increase production capacities over the coming years while committing a $5 billion investment in its oil and gas business. Addressing the company's annual general meeting (AGM), Vedanta Chairman Anil Agarwal said the company aims to nearly triple its zinc and lead production capacity to 3 million tonnes by 2031, reinforcing its position in one of its largest businesses. Also Read: Inside Anil Agarwal’s $100bn vision: Vedanta Resources plans to relist with US as a likely target The company also plans to double aluminium production capacity to 6 million tonnes per year over the next three years, while its iron and steel business is targeted to expand from 4 million tonnes to 15 million tonnes annually, Agarwal said. On the energy front, Agarwal said Vedanta would invest $5 billion over the next three to five years to expand its oil and gas business. Live Events "Will invest $5 bln over three to five years for Vedanta Oil & Gas," he said at the AGM. Also Read: A titan in tears: Anil Agarwal’s gritty journey from Bihar to billions He added that the company is targeting oil production of 500,000 barrels per day, saying, "At Vedanta Oil and Gas , we aim to produce 500,000 barrels per day." The expansion plans underscore Vedanta's strategy to significantly scale up capacity across its core businesses as it seeks to meet rising domestic demand while strengthening its global presence in metals and natural resources. The comments come as the conglomerate's four demerged entities- Vedanta Aluminium Metal Ltd, Vedanta Oil & Gas Ltd, Vedanta Power Ltd and Vedanta Iron & Steel Ltd- debuted on stock exchanges on June 15. Vedanta Oil & Gas reported a 16% year-on-year decline in average daily gross operated production in FY26, while revenue fell 13% to Rs 9,582 crore, according to an investor presentation dated April 29. EBITDA declined 7% from a year earlier to Rs 4,664 crore. The company's future will be built on three Ps — Produce More, Partner Better and Purpose Beyond Profit. Reflecting on the successful completion of Vedanta's demerger, he mentioned that each of the Group's five pure-play entities -- Vedanta Ltd , Vedanta Aluminium Metal Ltd, Vedanta Oil and Gas Ltd, Vedanta Iron and Steel Ltd, and Vedanta Power Ltd -- has the potential to become a USD 100-billion company. Highlighting technology as Vedanta's strongest partner, Agarwal said, "The future belongs to companies that embrace technology. Artificial intelligence is transforming industries across the world. Technology is our best partner. Whether it is exploration, operations, sustainability, safety or productivity, we are deeply embedding technology across every one of our businesses. Our goal is simple: To become smarter, faster, safer, and better." ( With inputs from PTI ) .Pbanner{display:flex;justify-content:space-between;align-items:center;background-color:#ec1c40;margin-top:20px;padding:5px 10px;border-radius:4px;color:#fff;line-height:10px;width: 100%;box-sizing: border-box} .Pbannertext{display:flex;align-items:center;font-size:16px;font-weight:600;font-family:'Montserrat';} .Pbannertext img{height:20px;margin:0 6px} .Pbannerbutton a{display:flex;align-items:center;background-color:#fff;color:#ec1c40;text-decoration:none;font-weight:600;padding:4px 8px;border-radius:6px;font-size:15px;font-family:'Montserrat';} .Pbannerbutton img{height:20px;margin-right:6px} .Pbannerbutton a:hover{background-color:#f7f7f7} Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) (You can now subscribe to our Economic Times WhatsApp channel)
Domestic steel prices are expected to remain mixed in the coming months. Long steel prices will likely stay under pressure due to monsoon demand weakness. Flat steel prices should remain relatively resilient, supported by lower imports. Raw material costs for steel production are also showing varied trends. This outlook reflects current market conditions and anticipated seasonal impacts. View More
New Delhi: Domestic steel prices are expected to remain mixed in the coming months, with long steel prices likely to stay under pressure due to weak demand during the monsoon season and high inventory levels, according to a Centrum report. The report said global and domestic steel prices showed mixed trends. US hot rolled coil (HRC) prices rose around 3 per cent month-on-month, marking the eighth straight month of gains. In contrast, European HRC prices declined about 4 per cent for the second consecutive month, while China's export HRC prices fell around 1 per cent after six months of continuous gains. Also Read: India will monitor Chinese steel imports before deciding on further curbs, source says In India, domestic HRC prices remained largely stable, supported by safeguard duties on imports and firm global prices. However, "long steel prices witnessed a sharp correction, with primary rebar declining ~9% MoM, giving back part of the strong rally seen since late 2025." The report attributed the decline to weak construction activity, higher inventories, aggressive trader discounts and increased competition from secondary rebar producers. Live Events Centrum said the weakness continued in July, noting that "spot HRC and primary rebar prices down ~Rs 210/tonne and ~Rs 3,020/tonne, respectively, from June averages." It also said prices of 304-grade stainless steel fell around 3 per cent month-on-month in June but remained about 19 per cent higher than the same period last year. Among raw materials, Australian iron ore prices declined around 7 per cent month-on-month. In India, NMDC reduced lump ore prices by Rs 250 per tonne and fine ore prices by Rs 150 per tonne. The report added that Australian coking coal prices increased about 2 per cent month-on-month and 36 per cent year-on-year due to limited spot supplies, firm supplier pricing and stronger demand from China following disruptions at domestic mines. South African non-coking coal prices remained largely unchanged from the previous month but were still 22 per cent higher than a year ago. In the non-ferrous metals segment, aluminium was the weakest performer. Also Read: Indian steelmakers grapple with resurgence of cheap Chinese imports On the outlook, the report said, "Going ahead, the domestic steel pricing environment is likely to remain mixed. Long steel prices are expected to stay under pressure amid monsoon-related demand weakness and elevated inventories, while flat steel prices should remain relatively resilient, supported by lower imports and steady raw material costs." .Pbanner{display:flex;justify-content:space-between;align-items:center;background-color:#ec1c40;margin-top:20px;padding:5px 10px;border-radius:4px;color:#fff;line-height:10px;width: 100%;box-sizing: border-box} .Pbannertext{display:flex;align-items:center;font-size:16px;font-weight:600;font-family:'Montserrat';} .Pbannertext img{height:20px;margin:0 6px} .Pbannerbutton a{display:flex;align-items:center;background-color:#fff;color:#ec1c40;text-decoration:none;font-weight:600;padding:4px 8px;border-radius:6px;font-size:15px;font-family:'Montserrat';} .Pbannerbutton img{height:20px;margin-right:6px} .Pbannerbutton a:hover{background-color:#f7f7f7} Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) (You can now subscribe to our Economic Times WhatsApp channel)
Rare earth minerals explained: Rare earths are vital for modern technology and defense applications. China dominates global processing, creating strategic supply chain vulnerabilities. Demand for these minerals is projected to grow significantly in coming years. India faces dependence on China for critical rare earth products. Diversifying supply chains requires substantial investment and international cooperation. View More
From the smartphone in your pocket to the fighter jet in the sky, one obscure family of metals quietly powers modern life and modern warfare. Rare earths have moved from a niche geological curiosity to a front-and-centre issue in global diplomacy, trade wars and defence planning. As Asit Saha, Director General of the Geological Survey of India (GSI), puts it, the concentration of rare earth processing capacities in a handful of geographies "has transformed these commodities from industrial raw materials into strategic assets," with mineral security today becoming "increasingly synonymous with economic and strategic security." Here is everything you need to know about rare earth minerals , why are they important and which countries have the largest reserves? Also read: Critical minerals, strategic stakes: Inside India's bid to break China's supply chain stranglehold What are rare earth minerals? Rare earths are a group of 17 metals with similar chemical properties but distinct physical and magnetic characteristics. Among these, the "magnet rare earths" neodymium, praseodymium, dysprosium and terbium, are the most commercially important. Live Events According to the International Energy Agency's (IEA) latest report, magnets made from these elements account for around 95% of the total value of rare earth consumption worldwide. These neodymium-iron-boron (NdFeB) magnets are among the strongest permanent magnets used in industry today, going into EV motors, wind turbines, industrial machinery, smartphones, hard drives, medical scanners, missile guidance systems and fighter jets, the invisible ingredient behind almost anything that needs to spin, sense or move precisely. Turning rock into a usable magnet is a long, technically demanding chain: ore is mined, crushed and concentrated, then chemically upgraded and separated, the hardest step, before being refined into metals, alloyed, and finally pressed into magnets. Losing capability at even one stage can bottleneck the entire chain. Why are they so important? Rare earths sit at the intersection of clean energy, advanced technology and national defence. Demand for magnet rare earths has already doubled since 2015, driven by EVs and wind turbines, and is set to grow another third by 2030 under existing policies, per the IEA. Automation, robotics and AI-linked hardware are expected to push demand even higher after 2030. The stakes became evident in 2025. When China tightened export controls that year, the resulting disruption threatened downstream production worth an estimated USD 6.5 trillion annually across countries outside China, per IEA data, over USD 3 trillion of that in automotives alone, with electronics, aviation, defence and data centres also exposed. The US and Europe each faced potential direct losses exceeding USD 1.5 trillion. That's why governments now treat rare earths less like a commodity and more like a strategic asset, on par with oil or semiconductors, with everyday uses ranging from LCD screens and satellites to certain cancer treatment drugs. Why are they called 'rare' if found worldwide? Here's the paradox: rare earths aren't actually rare. Most of the 17 elements are relatively abundant in the Earth's crust, some more common than gold or silver. The US Geological Survey (USGS) estimated global deposits at around 110 million tonnes in 2024. Also read: India, Russia deepen rare earths ties amid Quad critical minerals push What makes them "rare" is extractability, not scarcity. Economically viable, concentrated deposits are uncommon, and the elements are almost never found in pure form, their near-identical chemistry makes separation extremely difficult and only a handful of facilities worldwide can do it at scale. The process also carries real environmental costs: techniques like in-situ leaching produce acidic leachate and radioactive tailings, since rare earth ores often co-occur with thorium and uranium. High costs and environmental liabilities mean few companies pursue this without strong policy support, leaving the world dependent on one dominant supplier. Which countries have the largest reserves? China holds the largest known reserves at around 44 million tonnes (USGS), a substantial share of the global total. But Vietnam, Brazil, Russia and India also hold significant reserves, while Australia, the US, Lao PDR and Tanzania feature prominently in upcoming mining projects, per the IEA. Mining is actually the stage where diversification is furthest along: non-China projects could push mining capacity past 50 kilotonnes of rare earth content by 2035, led by Australia and the US. The real bottleneck lies further down the chain. Why does China dominate the supply chain? Having reserves is only part of the story, it's processing where China's dominance is overwhelming. In 2024, China accounted for 60% of global mined production of magnet rare earths, but 91% of refining and 94% of finished sintered permanent magnets, per IEA data — up sharply from around 50% in 2005. This scale has created a virtuous cycle: cheap, stable domestic demand feeding back into cheaper production. Competitors face the opposite, smaller scale, higher costs, tougher permitting, and buyers who want proven reliability before signing contracts. As Saha notes, "the principal bottlenecks are no longer confined to geological discovery. The greater challenge lies in establishing large-scale beneficiation, separation, refining and advanced material manufacturing capabilities." This concentration has already bitten twice. In April 2025, Beijing's export controls on seven heavy rare earths caused exports to collapse within weeks, forcing some automakers in the US and Europe to slow or halt production. In October 2025, China expanded the list to 12 elements and added a licensing requirement covering any global product containing Chinese-sourced rare earths or made using Chinese technology. The curbs were suspended in November 2025, but in January 2026 China tightened separate controls on dual-use goods bound for Japan, a sign tensions remain unresolved. Where does that leave India? India's exposure isn't abstract. Kaira Rakheja, Energy Analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), notes that "India's dependence on China is significant and spans from raw materials into downstream products and technologies," making diversification "an economic priority and also a matter of industrial and national security now." India's rare earth imports rose from roughly USD 14.1 million in 2014 to USD 17.5 million in 2024, with over 45% sourced from China, per Rakheja. The exposure is starker in finished products, China accounted for 59.6% to 81.3% of India's permanent magnet imports by value between 2022-23 and 2024-25, magnets that feed directly into India's EV, wind, electronics and defence programmes. Closing this gap, Rakheja cautions, isn't just about mining more ore, India's real gap is in "technology, environmental management capabilities, and downstream industries that can absorb processed materials." She sees India's talent pool and cost competitiveness as advantages, but says progress will likely need Quad-style cooperation extending into technology transfer, not just financing. The IEA estimates diversifying global supply chains needs around USD 60 billion in investment over the next decade, with refining and magnet manufacturing accounting for nearly 80% of that. It's a large number, but dwarfed by the potential USD 6.5 trillion annual cost of a full supply disruption, which is exactly why rare earths, and India's place in the chain, remain one of this decade's defining strategic battlegrounds. .Pbanner{display:flex;justify-content:space-between;align-items:center;background-color:#ec1c40;margin-top:20px;padding:5px 10px;border-radius:4px;color:#fff;line-height:10px;width: 100%;box-sizing: border-box} .Pbannertext{display:flex;align-items:center;font-size:16px;font-weight:600;font-family:'Montserrat';} .Pbannertext img{height:20px;margin:0 6px} .Pbannerbutton a{display:flex;align-items:center;background-color:#fff;color:#ec1c40;text-decoration:none;font-weight:600;padding:4px 8px;border-radius:6px;font-size:15px;font-family:'Montserrat';} .Pbannerbutton img{height:20px;margin-right:6px} .Pbannerbutton a:hover{background-color:#f7f7f7} Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) (You can now subscribe to our Economic Times WhatsApp channel)
China's exports to the U.S. jumped around 14% last month while imports grew 26%, according to CNBC calculation of the official data. View More
NANJING, CHINA - JULY 09: Aerial view of new energy vehicles waiting for shipment at Longtan Port Area of Nanjing Port on July 9, 2026 in Nanjing, Jiangsu Province of China. Yang Suping | Visual China Group | Getty Images China's trade growth accelerated far more than expected in June, as booming global demand for AI hardware and a rush by exporters to beat anticipated U.S. tariff hikes turbocharged shipments. Overall exports rose 27% from a year earlier in U.S. dollar terms, the strongest since October 2021, customs data showed Tuesday, quickening from the 19.4% gain in May and sharply beat economists' estimates for a 18.2% growth. In the first half-year, China's fastest-growing export categories were semiconductors, rare earths, autos and ships, while laggards included toys, footwear, steel and furniture. The country's shipments to the U.S. jumped around 14% last month, while imports grew 26%, according to CNBC calculation of the official data. Factory activity accelerated in June, as U.S.-bound orders recorded sharp year-on-year gains, according to China Beige Book, pushing up freight rates. Manufacturers are bracing for additional tariffs from U.S. President Donald Trump's Section 301 probes as the 10% broad-based duty is set to expire on July 24. China's exports to the U.S. have returned to positive territory in the first half of this year after experiencing double-digit year-on-year declines for most of last year. watch nowVIDEO4:5204:52Chinese exports to EM markets will dampen inflation there: PIMCOThe China Connection Imports grew 36% in June, the largest jump since June 2021, gaining pace from the 27.4% growth in May and sharply beating economists' forecast for a 24% growth. The trade surplus stood at $125.6 billion in June. Similar to exports, the import strength was concentrated in high-tech products, while persistent weakness in other categories pointing to sluggish domestic demand.Beijing has grappled with a deepening supply-demand imbalance, as strong industrial output and exports tied to the global AI investment boom continue to power headline growth, even as consumption and private investment weakens amid a prolonged property downturn and volatile global oil prices. Exports will likely remain strong in the second half of the year, said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, potentially further increasing trade tensions between China and trading partners, particularly Europe. Brussels and Beijing set up a trade and investment consultation mechanism last month aimed at rebalancing bilateral trade, with European officials targeting October for "tangible results." Shipment to the EU and the Association of Southeast Asian Nations rose 18.5% and 35%, respectively, while imports jumped 9% and 27%, the customs data showed. Another wildcard is the Russia sanctions bill proposed by the late U.S. Senator Lindsey Graham, which originally suggested secondary tariffs of up to 500% on goods from countries buying Russian oil and gas â a penalty that would hit China, the largest buyer of Russian crude."These factors could potentially throw a wrench in the excellent export performance so far," said Lynn Song, chief economist for Greater China at ING Bank. Oil import fell to decade-low China's crude imports dropped 41% from a year earlier to 29.3 million tons, according to CNBC calculations, reportedly the lowest level in nearly a decade. In the first half-year, China's total oil imports dropped 11% from a year ago in terms of volume. "This appears to reflect inventory drawdowns rather than a collapse in oil demand," said Julian Evans-Pritchard, head of China economics. China is expected to release its gross domestic product growth for the second quarter on Wednesday. Economists polled by Reuters expect growth to have slowed to 4.5% in the second quarter, after a solid 5% in the first quarter. Industrial output and retail sales for June, also due Wednesday, are projected to expand 4.7% and shrink 0.1%, respectively. Urban investment is estimated to decline 4.9% in the first half-year, deepening from 4.1% in the first five months, according to a Reuters poll.Investors are now looking to an expected Politburo meeting in late July for clues on stimulus that could shape policy for the rest of the year, although analysts expect no meaningful stimulus unless growth slows more sharply, given resilient exports and Beijing's focus on curbing excess factory capacity to fight deflation. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.