India’s electronics sector, one of the major achievements under the Make in India initiative, could witness long-term benefits following China’s decision to ease export restrictions on rare earth metals and critical minerals.
Rare earth elements (REEs) comprise the very stuff in a myriad of devices-hardly just companies assembling smartphones, laptops, gaming consoles, and electric vehicles, but also advanced display technologies. Rare earth elements (REEs) were an eternal source of limited supply, coupled with China dominating the supply chains worldwide, thereby posing an impediment to global electronics manufacturers.
The relaxation in export restrictions by China could go a long way in reducing supply constraints in India thus helping the domestic industry grow faster, and in removing supply-chain bottlenecks-according to experts of the industry. This is extremely important in sectors like semiconductors, consumer electronics, and electric mobility, where India aspires to build some competitive advantage.
Industry leaders believe that stable prices for critical minerals should lower production costs and foster further investment in the electronics ecosystem in India, thus quickening the country’s path to being recognized as a-global electronics manufacturing hub.
The change in policy comes at a time when India is enhancing PLI schemes to pull in global multinationals engaged in electronics and semiconductor fabrication. With a better supply assurance for rare earths, India should now find itself better placed to enter into global value chains and curtail its dependence on expensive imports from various markets.
Despite China being India’s strategic competitor, the loosening of export controls unexpectedly highlights global supply chains’ interconnectivity. Analysts say that the way is now clear for the electronics and EV sectors of India to be among the biggest beneficiaries if India continues to develop domestic processing and value addition firms.
