Over 21,000 jobs at stake as China restricts rare earths
What's the story
The audio electronics industry in India is facing a major crisis, with over 21,000 jobs at stake. This comes after China imposed restrictions on the export of rare earth metals. The estimate was shared by the Electronic Industries Association of India (ELCINA) with the Indian government. The job losses are mainly in speaker and audio component manufacturing units located primarily in Noida and South India.
Supply chain impact
China has restricted exports of key inputs for electronics
In April, China tightened export licensing for rare earth elements such as terbium and dysprosium. These are critical inputs for high-performance NdFeB (Neodymium-Iron-Boron) magnets used in consumer electronics. The move has disrupted global supply chains and severely impacted India's rapidly growing hearables and wearables sector. As a result, device manufacturers are now importing fully assembled speaker modules from China, creating a regressive trend of dependency on finished goods imports instead of component manufacturing.
Import reliance
India imports nearly all of its NdFeB magnet requirement
Rare earth metal-based magnets make up 5-7% of the bill of materials in India. The country imports nearly all (100%) of its NdFeB magnet requirement, with China accounting for 90% of total imports. However, prices for China-origin magnets have shot up due to tightened supply and administrative bottlenecks. Other sources like Japan, the EU, and the US are 2-3 times more expensive and lack sufficient capacity to meet India's rising demand.
Industry response
Impact on TV manufacturing expected to be limited: Videotex
Electronics manufacturing services firm Videotex has acknowledged the critical role of rare earth-based magnets in TV manufacturing, especially for speakers. Videotex Director Arjun Bajaj said that despite the challenge posed by heavy reliance on imports for these components, the specific impact on their segment is expected to be relatively limited. The company is working closely with suppliers to ensure adequate stock for the upcoming season and maintain production continuity.
Call for action
ELCINA's recommendations to the government
In light of the crisis, ELCINA has urged the Indian government to start a dialogue with China. The industry body has also called for exploring industry-specific exemptions like those in semiconductor trade channels. It has also suggested boosting local research and development, as well as the manufacturing of rare earth magnets under the electronics component manufacturing scheme.