What are China's curbs on lithium battery exports? Can it impact India?

China on Thursday imposed export controls on key battery technologies, affecting the globalsupply of components for electric vehicles and clean energy. The country's Ministry of Commerce restricted the export of technologies that are criticalfor the production of lithium batteries, which power most of the electric vehicles across the globe.

All you need to know about China's lithium policy

China processes 90 per cent of the world's rare earth materials. They are critical for the production of electronics, including solar panels and smartphones. China had already restricted these exports. However, on Thursday, the country formalised the rules.

Per the new rules, foreign companies need the Chinese government's approval to even export small amounts of rare earths. These companies will have to explain why they need to import rare earths.

The government also announced similar restrictions on the export of lithium batteries and some forms of graphite. They are mostly produced in China and are critical to many products, including EV batteries.

China has said that the regulations were framed to safeguard national security. The key target of the regulations is the US, China's business and strategic rival, which launched a trade war earlier this year since Donald Trump became the president.

With the new announcement, it is clear that China is likely to bar selling rare earths to arms manufacturers and some criticalchip companies.

The country has said that even the technology to mine and process rare earths, including magnets, can be exported only after securing express permission from the government.

Chinese firms now can't work with foreign companies on rare earths without the government's permission.

Activities like mining, smelting, and separation, magnetic material manufacturing, and recycling rare earths are included in these restrictions.

China's new regulations came days ahead of Xi Jinping and Donald Trump's expected meeting later this month.

China's controls even apply to the manufacturing of lithium iron phosphate (LFP) and lithium manganese iron phosphate (LMFP) battery cathodes.

India imports the majority of its lithium-ion battery material, including cathode materials and machinery, from China. The rules can now lead to delays, which can hamper New Delhi's EV and green energy goals. Solar panel manufacturing and electronics can also be disrupted because of China's policies on graphite and rare earths.

Since rare earths are also used in manufacturing lasers, car headlights, spark plugs, chips, capacitors, and smartphones, China's new rules can hamper other sectors in India as well.

India's electric mobilityplans entail replacing internal combustion engines with Lithium battery-poweredEVs. Indian manufacturers like Tata and Mahindra are already making EVs in India.

With the new policy getting implemented, automakers are bracing for a shortage of critical components. This could also lead to production delays and the rise of input costs.

Neodymium-iron-boron, a rare-earth magnet, is also crucial for the manufacturing of electric vehicles. They are needed to make motors. They also play a pivotal role in the manufacturing of power steering systems, wiper motors, and braking systems.

With the curbs, the availability of these materials will be hampered, affecting both EVs as well as ICE vehicles.