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China's Export Controls and India's Mineral Challenges UPSC NOTE

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  China's Export Restrictions On January 2, 2025, China added 28 U.S. entities to its export control list , restricting access to critic...

 China's Export Restrictions

  • On January 2, 2025, China added 28 U.S. entities to its export control list, restricting access to critical minerals like tungsten, lithium, and gallium.

  • These minerals are essential for high-tech industries, including aerospace, semiconductors, and electronics.

  • China’s strategic approach targets minerals critical to Western nations while avoiding disruptions to its own industries and export sectors.

India's Challenges in Critical Mineral Development

  • India has faced difficulties in developing its own critical minerals, including lithium deposits discovered in Jammu and Kashmir, which remain underdeveloped.

  • Only 48% of the mineral blocks available for auction in recent years have been sold.

  • Despite government efforts like the establishment of Khanij Bidesh India Ltd. (KABIL) and the Mines and Minerals Amendment Act, progress has been slow.

Reforms and Limited Results

  • The 2023 Mines and Minerals Amendment introduced exploration licenses to attract foreign and specialized exploration firms.

  • These reforms are designed to de-risk early-stage operations and encourage private-sector investment, but results have been underwhelming, with few foreign participants and limited progress on mining license auctions.

  • India's resource classification system and low demand for exploration licenses have hindered progress.

Need for Fiscal Incentives and Better Data

  • High-quality geological surveys are crucial to addressing the “information asymmetry” between miners and the government.

  • A potential solution could be offering upfront fiscal incentives for exploration, similar to the approach used in semiconductor manufacturing, to help unlock value in critical minerals mining and exports.


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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: China's Export Controls and India's Mineral Challenges UPSC NOTE
China's Export Controls and India's Mineral Challenges UPSC NOTE
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