Chinese trade curbs threatening $32 billion export ambition, warns India’s electronics sector

The letter also read that China also dominates the global production of rare earth elements and critical minerals essential to electronics manufacturing. Recent Chinese curbs on the export of these inputs have created a looming threat of supply shortages for Indian smartphone makers. According to the ICEA, alternatives are scarce, costly, difficult to scale, or logistically inefficient, exacerbating India’s existing cost disadvantages and creating systemic vulnerabilities.

Adding to the disruption, much of the capital equipment used in Indian electronics factories requires on-site support from Chinese technical personnel, who possess critical operational knowledge. In the last three months, China has reportedly instructed some capital equipment manufacturers to wind down operations in India and withdraw trained Indian professionals, severing key technology transfer links.

The ICEA has warned that unless the situation is addressed promptly, the gains made under the Production Linked Incentive (PLI) scheme—a key initiative aimed at transforming India into a global electronics hub—could be at “serious risk.”