China lifts ban on rare earth, fertilizer exports to India
What's the story
China has lifted its export restrictions on fertilizers, rare earth magnets and minerals, and tunnel boring machines to India. The assurance was given by Chinese Foreign Minister Wang Yi during his recent visit to India. The move is expected to ease supply chain bottlenecks for Indian industries and infrastructure projects.
Diplomatic talks
Shipments of critical items have already begun
During his two-day visit, Wang Yi assured External Affairs Minister S Jaishankar that China had started acting on India's requests for these three items. Reports indicate that shipments of these critical items have already begun. The decision comes after India raised concerns over China's sudden restrictions on fertilizers, rare earth magnets and minerals, and tunnel boring machines earlier this year.
Sectoral impact
Impact of China's earlier restrictions on India
The sudden imposition of an export ban had a major impact on India's Rabi season, affecting the supply of Di-Ammonium Phosphate (DAP). The delay in shipments of tunnel boring machines also affected key infrastructure projects by foreign companies with manufacturing plants in China. Meanwhile, the restriction on rare earth mineral exports severely impacted the auto and electronics sectors, leading to production disruptions.
Justification
Improving bilateral ties
China had imposed the restrictions citing security concerns and strained bilateral relations with India. However, during his talks with Jaishankar on Monday, Wang Yi said that the two countries should "view each other as partners and opportunities, rather than adversaries or threats." He also pointed to the resumption of "dialog at all levels" and "maintenance of peace and tranquility in border areas" as evidence of improving bilateral ties.