India’s electronics manufacturing industry will be able to figure out “alternatives” for sourcing rare earth metals and magnets from China, Union IT Minister Ashwini Vaishnaw said. Beijing enjoys a virtual monopoly in the sector and recently suspended exports of some of them. These elements, such as gallium, germanium, and antimony are used in most things, from smartphones to missiles.
“Whatever we have had discussions with the industry so far, the industry feels that they will be able to figure out alternatives to this, because the entire world has been preparing for diversifying value chains since Covid struck,” Vaishnaw told reporters Friday. He was speaking to the media after the inauguration of the mechanical innovation park of VVDN Technologies at Manesar in Gurugram.
While the availability of rare earth metals is not limited to China, it is in the efficient processing of these critical elements where Beijing has a substantial lead, which was once enjoyed by the US and Japan. In recent years, Japan has been able to restart some of its minerals’ processing industry owing to government policies, but the US is still very dependent on Chinese exports of these metals, even for use cases in its defence sector.
In response to the US administration’s reciprocal tariff heat, China suspended exports of seven heavy rare earth metals including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, as well as rare earth magnets earlier this week. A few months ago, it had banned exports to the US of gallium, germanium, antimony, and other key high-tech materials with potential military applications.
Vaishnaw also expressed optimism about a “positive outcome” from the upcoming visit of US Vice President JD Vance next week. India and the US are negotiating a bilateral trade agreement, and Vance’s India visit – where he is scheduled to meet Prime Minister Narendra Modi – is being seen as crucial.
“There will be a very positive outcome, is what I can say with a good level of confidence, because we have approached this thing in a very pragmatic way, and very agile way, and we have continuously engaged,” Vaishnaw said. “Over a period of time, India has emerged as a very trusted country, because the way Prime Minister Narendra Modi conducted foreign policy, that trust has been generated about our country today, and that is going to be a big and important factor for all of us.”
Vaishnaw said that the electronics sector in India was set to undergo an “exponential” growth in the coming years, partly assisted by government subsidy schemes, such as the recently notified Rs 23,000 crore incentive scheme for electronics components manufacturing. India’s supply chains for electronics had grown over the last decade to achieve production value of over Rs 11 lakh crore, while exports of electronics goods had crossed Rs 3.25 lakh crore value during this time, he said.
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Guidelines to operationalise the components subsidy scheme will be issued “very soon,” Vaishnaw added.
