India's Electronics Industry Faces Strategic Chinese Roadblocks

New Delhi, Jul 18 (KNN) India’s electronics manufacturing sector has raised serious concerns over China's tightening grip on rare earth exports, calling it a “strategic risk” to the country’s ambitious electronics and smartphone production goals.

Industry officials claim that China is imposing informal restrictions on rare earth elements, withdrawing key technical personnel from Indian operations, and blocking the export of specialised machinery—moves seen as deliberate and targeted.

Rare earth elements such as terbium, dysprosium, and neodymium are essential for making NdFeB magnets, which power everything from audio devices to electric vehicles and wind turbines.

With China controlling a majority of the global supply, India’s reliance has become a major vulnerability. Elcina, an industry association, has warned that over 21,000 jobs in India’s audio and wearable electronics sector could be lost if the supply disruption continues.

In addition to material shortages, the industry is also facing operational hurdles as Chinese technical experts—who play a vital role in running and expanding Indian manufacturing facilities—are being recalled.

This not only disrupts production but also slows down technology transfers and quality control, which are crucial for India's export competitiveness.

Furthermore, Indian firms are struggling to import high-end electronics manufacturing equipment from China.

These machines are critical for scaling up domestic production of smartphones, semiconductors, and electric vehicle components—sectors where India aims to become a global leader.

In response to these growing challenges, the Prime Minister’s Office (PMO) has stepped in.

Government officials are now reviewing strategies to secure rare earth supply chains, promote domestic magnet manufacturing, reduce import bottlenecks, and diversify sourcing away from China.

The issue is being treated with high urgency as it directly impacts India’s goal of becoming a $32 billion smartphone exporter by FY26.

(KNN Bureau)