Published: July 21, 2025 3:07 PM IST 
Big update on Rare Earth magnets: In a significant development impacting manufacturing activity across the globe, China is reportedly using export controls on rare-earth minerals as a strategic tool. Causing global supply chain disruptions and economic uncertainty through its unofficial export bans and tactical resumptions, Xi Jinping’s China is trying to assert its economic power. Experts have noted that China had earlier stopped the exports of rare-earth magnet which are important for several industries like electronics, electric vehicles, wind turbines and defense, which led to its massive shortage in countries like USA and India.
However, after some months in June, China relaxed some of these unofficial export restrictions, resulting in an increase in supply of the critical minerals across the world. Data showed that a huge rise of 158% month-on-month in the shipments was seen after China started the exports.
Informal trade restrictions imposed by China on capital equipment, critical minerals, and skilled technical personnel, can adversely impact India’s electronics manufacturing ecosystem and constrain India’s deeper integration into global value chains (GVCs), leading industry body India Cellular and Electronics Association (ICEA) has said.
India’s electronics and mobile manufacturing sector has seen a remarkable growth over the past decade, driven by forward-looking policy interventions and private sector investments and the shift of GVCs to India.
China remains the dominant global source of high-precision tools and specialised machinery – an outcome of three decades of industrial clustering and deep GVC integration. “For the electronics sector, including smartphones, this has created a high dependency on China for capital equipment,” the ICEA said in its letter.
Recent curbs by China on rare earth materials are also risking input shortages for smartphone manufacturers operating in India.
(With inputs from agencies)
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