Rare earth supply risk: Indian electronics companies are concerned if Chinese curbs can touch; But can Beijing also pay for this? – Times of India

A number of applicants among India’s Electronics Component Manufacturing Scheme (ECMS) have marked their concern about achieving their first -year production goals as a result of continuous shortages of rare earth minerals. According to ET, at least 10 companies have raised the issue with the Ministry of Electronics and Information Technology (Meity), warning that if the shortage continues for another six months, they may not be able to meet the stimulation -related thresholds.The rare earth’s scarcity stems from export restrictions imposed by China, who controls more than 90% of global rare earth processing. China introduced special license requirements for seven rare earth elements and associated magnets from 4 April this year, which led to disturbances in the most important industries. These include electronics, cars and technologies for clean energy.“Companies have expressed their concern, but within the sector it is not an alarming protest,” an officially aware of the case quoted by ET. “If there is a component that uses rare earth, instead of importing that rare earth and making that component into India, they will easily import that component.”Although companies investigate alternatives, such as purchasing various suppliers or shifting to rare-earth-free technologies, the timing has been a challenge, especially for scaling up production for export. “The ECMs were unveiled at a time when many entities want to scale up and benefit from exports,” said Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), as quoted by ET. He added that delivery shocks in rare earth magnets have hit the sector hard.The RS 22,919 Crore ECMs, launched in May, aims to build a robust domestic ecosystem for electronic components such as multi-layered PCBs, lithium-ion cells, resistors, capacitors, display modules. PCBs have attracted special attention to applicants, according to KS Babu, secretary of the Indian Printed Circuit Association (IPCA), which stated that the schedule is tackling both multi-layer and high-density of interconnectboards. However, he also pointed out that the local production of important inputs as laminates covered with copper is still missing. “Chinese suppliers now benefit by squeezing prices, with reference to problems with shipments,” said Babu, according to Et.The schedule, effective from FY26 to FY32, includes a one -year pregnancy period. Manufacturers, in particular MSMEs, have sought faster access to stimuli to restore their investments. A PCB maker established in Delhi was cited by ET and said that the government informally insured clementia during the verification and claim process.In response to industry requests, Meity will extend the ECMS application window after 31 July, as confirmed by civil servants. Many small companies are still completed from their sourcing channels, joint ventures and technical partnerships.In a written answer to the Rajya Sabha, Minister of State of Commerce and Industry Jitin Prasada noted that the export restrictions on rare earth magnets have led to the bottlenecks of supply chain for car and electronics sectors. However, the ministry has not received specific reports of cost -rate or project delays from industrial hubs in Maharashtra, according to PTI news agency.Despite the disruption, industrial leaders remain hopeful. “China cannot afford to continue an export ban for a long time because their companies will start bleeding and it will put a long -term pressure on their relations with many countries,” said Chandak, according to ET.