Archive · 29 Jul 2025
China's Rare Earth Ban to Impact Indian Industries, Banks: SBI Report
China's decision to restrict rare earth trade is set to affect India.
Rare earths are important for making many products.
Because India relies on China for these materials, this ban could disrupt manufacturing and exports in key sectors.
It may also affect banks that support these industries.
To address this, India may need to find alternative sources for these crucial resources.
China's ban on rare earth materials may disrupt Indian manufacturing and financial systems.
Key sectors like transport equipment, and electronics could be impacted.
India's rare earth imports from China were approximately $33 million annually over the past four years, peaking at $31.9 million in FY25.
Imports of rare earth magnets reached $291 million in FY25.
The Indian government launched the National Critical Mineral Mission (NCMM) in 2025 to establish self-reliance in the critical mineral sector.
- Who
- SBI, China, Indian Industries and Banks
- What
- China's ban on rare earth materials and permanent magnets could severely disrupt India’s core manufacturing sectors and financial system.
- When
- FY25 (impact observed), 2025 (NCMM launch)
- Where
- India
- Why
- China's ban on rare earth materials.
Impacts of China's Trade Ban
Not Applicable
Economic Impact
Impacts of China's Trade Ban
Domestic production and exports will be negatively affected in key sectors. Banks and NBFCs may face rising trade and export uncertainties.
Not Applicable
Not Applicable
- Source
- SBI Report
- Rare Earth Imports (Average)
- $33 million annually
- Rare Earth Imports (FY25)
- $31.9 million
- Magnet Imports (FY25)
- $291 million
- Impacted Sectors
- Transport equipment, basic metals, machinery, construction, electrical, electronics
- Mission
- National Critical Mineral Mission (NCMM)
- Mission Fund
- Rs 18000 crore (2025-31)
Sources
Rare earth disruptions could trigger exposure of banks to sectors such as transport equipment, basic metals: SBI Research
China’s Rare Earth Squeeze: Why India’s Industries & Banks Could Be Headed For A Supply Shock
China’s Rare Earth Squeeze: Why India’s Industries & Banks Could Be Headed For A Supply Shock
China rare earth ban to impact domestic production, exports across 5 sectors in India: SBI economists
