Highlights
- India’s ambitious electronics manufacturing initiative struggles with rare earth material shortages controlled by China.
- ECMS’s ₹22,919 crore budget challenged by strategic mineral supply vulnerabilities.
- China’s export controls create significant barriers for India’s emerging electronics and PCB manufacturing sectors.
India’s ambitious Electronics Component Manufacturing Scheme (ECMS), launched to turbocharge local production of critical tech inputs, is facing rare earth headwinds that underscore a familiar geopolitical chokehold: China’s export controls.
In a well-reported piece from The Economic Times (opens in a new tab), authors Subhayan Chakraborty and Dia Rekhi highlight a brewing tension between ECMS’s lofty goals and real-world materials bottlenecks. Since China tightened rare earth export licensing earlier this year, at least 10 firms have flagged concerns to India’s Ministry of Electronics and IT. Some fear missing year-one production milestones unless the shortage eases within six months.
What’s Real and Relevant
The article accurately captures how the ripple effects of China’s policy decisions are reaching India’s industrial doorstep. It’s well known that China controls over 90% of global rare earth processing, and its grip extends across the supply chain—from oxides to finished magnets. For India’s emerging PCB and electronics industries, many of which rely on permanent magnets and rare earth-based components, this presents a clear vulnerability.
The ECMS’s ₹22,919 crore (~$2.75B USD) budget shows India’s seriousness. Applications topping 110 within weeks of launch reflect real demand. And China’s recent export curbs—motivated by both geopolitical and economic pressures—are no small footnote.
What’s Spun or Soft-Pedaled
While the report mentions “other options like alternative technologies,” it glosses over how limited and immature these alternatives currently are. There are no plug-and-play substitutes for neodymium or dysprosium magnets in high-performance electronics or EVs. The idea that component import substitution can sidestep this issue ignores the long-term consequences of continued foreign dependency.
Also underexamined is India’s total absence of domestic feedstock and magnet manufacturing capacity. The article mentions copper-clad laminate shortages and Chinese price gouging, but doesn’t fully unpack the downstream consequences: reduced margins, delayed deliveries, and lost export credibility.
Why This Matters
This is more than a hiccup—it’s a case study in why vertical integration and rare earth resilience are now industrial policy imperatives. For India, ECMS could flounder if it can’t secure stable critical mineral inputs. For the U.S. and its Quad allies, the takeaway is clear: friendly nations trying to diversify from China are still caught in China’s shadow.
Rare earths aren’t just raw materials—they’re strategic leverage. And Beijing is flexing it.
Source: The Economic Times, July 26, 2025. Authors: Subhayan Chakraborty & Dia Rekhi
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