China’s Restrictions on Rare Earth Mineral Exports to Reportedly Adversely Impact Supply Chain Jobs in India

China's continued restrictions on the export of rare earth minerals could reportedly have a negative impact on India's consumer tech supply chain job market. In 2023, the Chinese government imposed stricter export controls over seven rare earth minerals due to the ongoing tariff war and trade-related tensions. Among these seven elements, terbium and dysprosium play a critical role in manufacturing speakers, microphones, haptic motors, and camera modules, as per the report. Experts have reportedly highlighted that India should look for alternative sources to obtain these elements.

Indian Job Market to Reportedly Face Layoffs Amid China's Export Curbs

According to a Moneycontrol report, India's smartphone, smart TV, and audio device manufacturing could suffer major supply chain disruptions if China continues to place export curbs on rare earth elements. Notably, these restrictions are placed on dysprosium, gadolinium, lutetium, samarium, scandium, terbium, and yttrium.

Continued export restrictions could reportedly lead to an increase in costs and compromises in the features of the abovementioned devices. Fearing this, several companies have reportedly resorted to importing fully assembled speaker modules from China. The publication did not mention the names of these companies. While this could be a short-term solution, in the long run, this will add a higher price tag to consumer tech devices.

The Electronics Industries Association of India (ELCINA) shared a report with the government, highlighting the extent of the negative impact India could suffer, as per the report. The industry body reportedly said that between 5,000-6,000 direct jobs and as many as 15,000 indirect jobs are at risk in the speaker and audio component manufacturing sector. Notably, most of these at-risk jobs are said to be in Noida and southern India.

Among the seven elements, the restriction on terbium and dysprosium is said to be creating a major barrier for India's manufacturing industry. These two elements are used to create neodymium-iron-boron (NdFeB) magnets, which are high-performance in nature and are used as a component in speakers, microphones, haptic motors, and camera modules.

As per the report, smartphones only use a small volume of these magnets per unit; however, the massive number of units produced every year means even these devices are not spared from the negative impact. Experts who spoke with Moneycontrol, told the publication that there is now a greater need for India to find alternative sources for these elements to safeguard the manufacturing industry. Another solution offered reportedly includes focusing on the recycling of devices to ensure these magnets do not go to waste.