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India.com
5 days ago
- Business
- India.com
India gets BIG lead on super magnets, signs deals with eight countries to...; bad news for China due to...
(File) India rare earth magnets: In a significant move that could deal a severe blow to China's monopoly over rare earth elements (REEs), India is in talks with several countries who have sufficient reserves of rare earth minerals. The development comes after China restricted the export of rare earth magnets to India following Operation Sindoor, citing 'national security' concerns. Which countries has India signed agreements with? In a written reply during the ongoing monsoon session of the Parliament, Union Minister Jitendra Singh informed the House that India has already agreements to procure super magnets aka rare earth magnets and other rare earth minerals from at least eight countries and talks are underway with Brazil and Dominican Republic. 'To develop bilateral cooperation with countries rich in mineral resources, the Ministry of Mines has signed agreements with the governments of many countries. These countries include Australia, Argentina, Zambia, Peru, Zimbabwe, Mozambique, Malawi, Cote d'Ivoire (Ivory Coast) and organizations like the International Energy Agency (IEA),' Singh revealed. Jitendra Singh, who is the Minister of State (Independent Charge) of the Department of Atomic Energy, further stated that the Ministry of Mines has also initiated the process of entering into Government-to-Government (G2G) MoUs with Brazil and Dominican Republic to develop cooperation in the field of rare earth minerals and critical minerals. 'The primary objective of these agreements is to create a developed framework for research, development and innovations in the mining sector, with a special focus on rare earth elements (REE) and critical minerals,' he added. How India is working to develop new supply chain of rare minerals? According to the minister, the Indian government is working strengthen the supply chain of critical minerals with initiatives like Mineral Security Partnership, Indo-Pacific Economic Framework (IPEF), India-UK Technology and Security Initiative (TSI), Quad and Critical and Emerging Technologies (iCET). Does India have rare mineral reserves? As per official data, India has around 7.23 million tonnes of rare earth element oxides and 13.15 million tonnes of monazite– an important source of thorium used in generating nuclear energy. Monazite reserves have been discovered in coastal areas, red sand and alluvial soil areas of Andhra Pradesh, Odisha, Tamil Nadu, Kerala, West Bengal, Jharkhand, Gujarat and Maharashtra. Singh stated that about 1.29 million tonnes of rare earth minerals have been found in parts of Gujarat and Rajasthan, adding that the Geological Survey of India (GSI) has discovered a whopping 482.6 million tonnes of resources of rare earth element (REE) ore at various cut-off grades in 34 exploration projects. Why India needs rare earth magnets? Super magnets or rare earth magnets are used in the manufacturing of ll kinds of advanced equipment ranging from electric vehicles (EV) to military drones and radar systems. According to industry estimates, India expects to import 700 tonnes of magnets worth $30 million this year, a major chunk of which comes from China. As per customs data, Chinese exports of permanent magnets fell 51% to 2,626 tonnes in April after the export ban came into force, while India imported 460 tonnes of rare earth magnets, most of which came from China, in the financial year that ended on March 31, 2025. According to official estimates, China controls more than 90% production of rare earth magnets, but imposed restrictions on their export in April in response to the tariffs imposed by US President Donald Trump.
New Straits Times
21-07-2025
- Business
- New Straits Times
Easing foreign equity caps may boost FDI but raises sovereignty risks, say economists
KUALA LUMPUR: Easing foreign equity limits in strategic sectors may unlock fresh foreign direct investment (FDI) inflows into Malaysia but also pose structural and sovereignty-related risks, economists said. Malaysia has gradually liberalised its foreign equity rules including allowing up to 100 per cent ownership in the manufacturing sector since 2009. The country, however, still imposes significant limits in sectors like telecoms, finance, insurance, agriculture, property and healthcare. Investment, Trade and Industry Ministry last week reportedly said it was in talks with regulators and key industries about relaxing foreign ownership limits as part of efforts to reduce the 25 per cent US tariff on Malaysian goods. UCSI University Malaysia associate professor in finance and research fellow at Centre for Market Education Dr Liew Chee Yoong said the economic and structural impacts would likely be multifaceted. Liew said relaxing equity limits in Malaysia could potentially boost FDI inflows by 15-25 per cent in selected sectors, offering much-needed capital for infrastructure upgrades and technological progress. "This could facilitate valuable knowledge transfer, particularly in areas like 5G deployment, financial technology and cloud infrastructure," he told Business Times. Greater competition from foreign players could spur innovation and may lead to more competitive pricing for consumers, he added. "Strengthening linkages with global corporations might also bolster Malaysia's position within international supply chains," he said. Liew said the push for Malaysia to ease the caps is driven by a combination of interrelated factors. "Primarily, the US seeks enhanced market access for its corporations, particularly large financial institutions, telecommunications providers and technology firms, enabling them to gain controlling stakes and greater operational influence within Malaysia's developing economy. "This push also aims to secure competitive parity for US companies against regional rivals, such as Singaporean or Chinese firms, which may operate under different frameworks or have established significant regional headquarters." He added that these kinds of requests are frequently used as bargaining tools in broader trade talks, such as under the Indo-Pacific Economic Framework, to gain certain advantages. From a geopolitical standpoint, strengthening economic ties through investment is a strategic move to offset China's growing influence in the region, he said. Balancing growth and sovereignty Liew said one of the main advantages from the possible relaxation is the substantial inflow of foreign capital, which plays a crucial role in enhancing national infrastructure and supporting the growth of high-value industries. He added that gaining access to advanced technologies and international best practices could boost productivity and competitiveness, create jobs in higher-value sectors, and deepen economic ties with key partners such as the US. "However, these advantages are counterbalanced by substantial risks. Foremost is the erosion of control over strategic national assets and key industries, raising sovereignty concerns. "Domestic firms, particularly small and medium enterprises and Bumiputera-owned companies, face the risk of marginalisation or acquisition," he added. Liew said the disruption to long-standing socio-economic policies designed to ensure equitable wealth distribution could have significant political and social repercussions. "Furthermore, substantial profit outflows from foreign-controlled entities could negatively impact Malaysia's foreign exchange reserves and current account stability over time," he added. Putra Business School associate professor Dr Ahmed Razman Abdul Latiff said Malaysia imposes equity restrictions to promote greater local participation in industries and to ensure that wealth distribution benefits local investors and, ultimately, the broader population. "Lifting up such restrictions is still doable as long as the initial objectives are maintained or strengthened. "Maybe no longer through equity participation but perhaps with higher technology transfer such as technical know-how and co-sharing of intellectual properties rights," he added. Razman said this approach helps accelerate innovation within local industries and enables the development of competitive homegrown products, which in turn supports the long-term sustainability of local businesses. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said opening up Malaysia's economic sectors to foreign investors must be done thoughtfully to safeguard local interests. "At the same time, we would also want our local companies to be able to compete effectively and be able to penetrate the overseas market," he said. Current landscape of foreign equity in Malaysia Afzanizam said as of June 2025, foreign ownership in Malaysian equities stood at 19 per cent, down from the historical peak of 25.1 per cent recorded in June 2013. This comes despite the market's appealing valuation, with the FTSE Bursa Malaysia KLCI trading at a price-to-earnings ratio of around 14 times, compared to the historical average of 17 times. "Among the criticisms is the liquidity of the stocks as the large companies, especially the government linked companies are being held by domestic institutions such as the government linked investment companies. "This has led to the amount of available stocks to invest is not economically viable for the foreign institution to invest from the liquidity stand point," Afzanizam told Business Times. Meanwhile, Liew said many service industries in Malaysia still face strict foreign ownership limits. For example, the telecommunications sector generally allows up to 49 per cent foreign ownership, while commercial banks are subject to a lower cap of 30 per cent. Investment and Islamic banking are typically limited to 49 per cent as well. "The insurance sector allows up to 70 per cent foreign ownership. Further limitations apply to agriculture and property, such as thresholds between 30 per cent and 50 per cent for agricultural land. "Crucially, the long-standing Bumiputera policy, mandating a 30 per cent equity share for Bumiputera interests, continues to influence ownership structures across various sectors," he shared. Key industries likely under review Afzanizam said Tengku Zafrul may have been referring to key sectors such as telecommunications and banking, given their significant role in Malaysia's economy. Sharing a similar view, Liew noted that the telecommunications sector is currently subject to a 49 per cent foreign ownership cap, which impacts major companies like Maxis Bhd and Axiata Group Bhd. He added that banking restrictions are even more pronounced, with commercial banking limited to 30 per cent foreign ownership and investment banking to 49 per cent. "Other sectors likely under discussion include professional services such as legal, accounting, and engineering firms, which often face limits between 30 per cent and 49 per cent; private healthcare, capped at 30 per cent; and potentially defence-related industries or critical transport infrastructure like ports and airports, deemed vital for national security and sovereignty," Liew said.
The Diplomat
08-07-2025
- Business
- The Diplomat
The Path to a US-India Trade Deal Lies Through Economic Security
A broader trade agreement, including cooperation on key supply chains, foreign investment, and advanced technologies makes a deal more likely and can help the U.S. and India more effectively counter China. Negotiations for a U.S.-India trade deal have been progressing at breakneck pace, as officials rush to reach an agreement before President Donald Trump's July 9 tariff deadline. India being near the front of the line is surprising, given that the two countries have consistently imposed high trade barriers and haven't signed a deal despite years of discussions. But Delhi is ready to negotiate because it sees an even bigger geoeconomic play: undercut China's status as a leading manufacturing hub and destination for investment by securing key supply chains and investing in advanced technologies. To seal the deal, Washington and Delhi should put economic security issues at the heart of the agreement. Getting to yes will require overcoming a long history of nos. In 2019, the U.S. removed India from the Generalized System of Preferences (GSP) program, and India imposed retaliatory tariffs on 28 U.S. goods in response to earlier Section 232 tariffs on steel and aluminum. While mutual tech and defense cooperation increased during the Biden administration, and India joined the non-trade pillars of the Indo-Pacific Economic Framework, there was little progress in improving market access apart from the removal of previous tariffs and resolution of WTO disputes. Despite Trump's recent optimism, ongoing negotiations for a first tranche deal are facing several hurdles, largely due to U.S. demands for lower trade barriers for steel and agricultural products. The task of lowering tariffs and non-tariff barriers for agriculture is especially politically costly for the Indian government, given that 46 percent of the workforce is involved in agriculture. While still willing to negotiate, Indian officials have signaled their preference for a good deal that puts national interest first rather than just a deal, which may defer discussions on tariffs for key industries and constituencies to a future round of negotiations. Washington and New Delhi's mutual economic dependence on China presents yet another opportunity for collaboration in national interest. The U.S. and India are reliant on China for a variety of goods, ranging from steel and rare earths to solar cells and pharmaceutical inputs, which are vital for commercial industry as well as national security needs. Recent episodes, including China's export ban on rare earths, have highlighted just how vulnerable their respective economies are to Chinese economic coercion. This dependence is holding back the U.S.-India economic partnership, and while reducing tariffs and other trade barriers is an important step, addressing the dragon in the room can cement this relationship as 'the defining partnership of the 21st century.' To this end, policymakers must consider deepening cooperation in three core pillars of economic security — securing supply chains, building resilience against foreign economic coercion, and building an allied ecosystem for advanced technologies — to enhance the value of a trade deal and address common security concerns. Collaboration on supply chains should include sectors critical to economic and national security, and where there is a clear dependence on China. Obvious candidates include pharmaceuticals and critical minerals, where China either manufactures a large proportion of inputs or possesses significant reserves and processing capacity. India is a key supplier of pharmaceutical products to the U.S. but is reliant on China for key starting materials. While India has already introduced incentives to onshore the production of inputs, there is space to coordinate industrial policy with the U.S. to fund the co-production of key starting materials and active pharmaceutical ingredients, or establish a strategic pharmaceutical ingredient reserve. Similarly, India's vast critical mineral reserves (rare earths, cobalt, and graphite) and push for domestic production could provide an opportunity for the U.S. to fund and transfer technology for refining projects in exchange for security of supply agreements. Building resilience against Chinese economic coercion also includes anticipating and mitigating the risk of Chinese capital in domestic markets while simultaneously filling the gap through bilateral investment. While both countries have robust investment screening frameworks, India has pursued a significantly more restrictive policy toward Chinese FDI since a border clash in 2020. Attitudes in Delhi may be softening, however, as India needs foreign investment to build out domestic manufacturing. To court investments from the U.S., Indian officials must consider expanding the automatic route for FDI approvals to more sectors, including raising the 74 percent cap for the burgeoning defense industry, and reducing tax rates for U.S. firms investing in target sectors and regions. Although FDI from India pales in comparison to that from China ($4.6 billion vs $28 billion in 2023), Washington should include Indian investment into a proposed CFIUS fast track to ensure it capitalizes on the growth of the world's fourth-largest economy. To win the global technology race, the U.S. must also look to India, among other allies, to manufacture and adopt advanced technologies. Capturing the market of the world's most populous country, after all, is perhaps the only way to achieve global adoption of tech platforms like AI and quantum based on U.S. IP. The above-mentioned reforms are key to increasing investment and developing secure supply chains, but the core problem of technology and knowledge transfer remains. The scrapping of the 'AI Diffusion Rule' is a step forward in increasing access to advanced chips among partners like India and Singapore, and the Trump administration should prioritize such countries in negotiations relaxing export controls for advanced tech. Given that Washington will be rightfully concerned about the flow of these chips to Russia and Iran, New Delhi should consider increasing resources to the Directorate General of Foreign Trade and customs authorities to better enforce the SCOMET (special chemicals, organisms, materials, equipment, and technologies) list and implementing contractual solutions that impose liabilities on exporters shipping to Russia or Iran. While the U.S. and India often clash on tariffs and market access, a broader trade agreement including concrete provisions for cooperation on key supply chains, foreign investment, and advanced technologies may help them move past enduring pain points and more effectively counter China's coercive practices.
Yahoo
11-04-2025
- Business
- Yahoo
Trump's tariff tantrum showed why he's wrong about global trade
Just after taking the oath of office earlier this year, President Donald Trump vowed to overhaul America's trade system, promising that under his policies, 'the American dream will soon be back and thriving like never before.' His plan: to tear down America's decades-old network of trade deals and return domestic manufacturing to levels not seen since the 1950s. Nearly three months later, we can see how poorly that's working out so far. After Trump imposed a 10% worldwide baseline tariff and a whopping 125% cumulative tariff on imports from China, the stock market sank, other countries retaliated, our trade partners began looking for leadership elsewhere and Trump was forced to back down, while claiming this was the plan all along. Through the tumult of the last week, one thing has become clear. The global economy is here to stay, with or without us. For years, Trump has treated global trade as a zero-sum game and sold his supporters a pipe dream of gleaming American factories. But the domestic manufacturing heyday that Trump keeps promising to restore is just as obsolete as the coal reliance he's trying to revive and just as outdated as the gilded '80s aesthetic of his properties. The full impact of Trump's economic policy has yet to be felt, but it's taken just over a week for other countries, including our allies, to begin making plans for a global trade system in which the United States is a supporting cast member. Reports broke this week that our allies Japan and South Korea are pursuing trade talks with our mutual rival, China. This is a far cry from 2022, when the Biden administration established the Indo-Pacific Economic Framework — a coalition of more than a dozen countries in the region specifically designed to strengthen trade and supply chain resiliency while reducing Beijing's influence in the region, all with the United States leading the way. Canadian Prime Minister Mark Carney pledged a $5 billion trade diversification initiative to reduce our biggest trading partner's reliance on the United States. Carney has also said Canadians would have to 'fundamentally reimagine our economy' in the face of Trump's trade war. Even with Trump issuing a slapdash 90-day pause on these tariffs in the face of crumbling markets, his constant waffling on the issue and the lack of clarity surrounding his endgame risk making the U.S. too volatile to be seen as a reliable partner. Disrupting our national influence and making Americans' lives harder is bad enough, but Trump's tariff tantrum is playing with political fire, too. For decades, voters have wrongly seen the Republican Party as the party of fiscal responsibility. The 2024 election was no different. In NBC News' final poll before Trump and then-Vice President Kamala Harris faced off this past November, Trump held a 10-point lead in voter perception on handling the economy and a 12-point lead on dealing with the cost of living. If the worst impact of Trump's tariff obsession comes to fruition, he risks single-handedly wiping out what has been perceived as his party's strongest electoral issue. We're already seeing the ground shift, as a recent Wall Street Journal poll found 52% of Americans disapprove of Trump's economic policies — a massive change from the pre-election Journal poll, where voters approved of Trump's economic plan by double digits. So combustible is Trump's economic recklessness that even some Republican lawmakers are sheepishly sounding the alarm. Americans will begin casting their ballots in the 2026 midterms in a year and a half. Trump had better think carefully about what he wants their wallets to look like when they choose which names to check. For more thought-provoking insights from Symone Sanders-Townsend, Michael Steele and Alicia Menendez, watch 'The Weekend' every Saturday and Sunday at 8 a.m. ET on MSNBC. This article was originally published on
