Toyota Tsusho to Build Rare Earth Plant in India

India is increasing its efforts to attract investment from other countries and Toyota Tsusho will build a rare earth plant in the country. At the same time, the Hindustan Times reported on Nov 6 that the country will significantly reduce the number of energy and power products imported from China.

According to data provided by the General Administration of Commercial Intelligence of India, from 2018 to 2019, the Indian energy and power industry has imported a total of approximately 710 billion rupees worth of equipment, of which approximately 212.3 billion came from China. This number appears to be very large in the context of the Indian government's efforts to reduce its dependence on Chinese products.

Indian annual energy import bill could almost double to $230 billion in the next decade if India does not switch from oil to natural gas and improves conservation activities. According to a Goldman Sachs report, the country’s annual energy imports in the next decade could go up to $230 billion from $120 billion currently, driven by economic growth, greater industrialization, and urbanization. The report added that measures like switching from oil to natural gas and improving conservation activities can reduce energy imports of the country significantly.

In order to achieve "self-reliance" and reduce imports from China, the country’s power sector has recently drawn up two lists. Among them, the first list contains 239 items. The country currently does not have the production capacity for these items. The second list includes 95 items that the country has the production capacity, so no power companies, public or private companies are allowed to import these items.

The above two lists have been included in the annex to the self-reliant policy proposed by the Modi government. In addition, the Ministry of Electricity of the country has also designated a special laboratory to test imported electrical equipment in accordance with the "Indian Standards" to ensure that there are no malignant plug-ins in imported products that may cause national security risks.

While restricting the import of Chinese products and building its industrial advantages, the country is also trying to attract investment from other countries. According to the Hindustan Times report on Nov 6, sources said that the Japanese government has agreed to provide financial subsidies for Toyota Tsusho Corporation and Sumida Corporation to transfer production lines from China to India. Toyota Tsusho will build a rare earth plant, and Sumida will build an auto parts plant.

A government official stated that the country has been working hard to persuade these companies to invest, and the Japanese decision will make this process "more attractive." According to reports, Japan and India are seeking to establish alliances against China's dominance in the supply chain, such as rare earth elements. The Japan Foreign Trade Organization previously announced that it plans to help 10 Japanese companies cooperate with Indian companies in high-tech cooperation, including Suzuki and Olympus.

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