What has China restricted exports of, affecting India?

China has restricted exports of high-precision machinery, sub-systems, and equipment related to rare-earth elements.

How are Indian manufacturers responding to China's export curbs?

Indian manufacturers are starting to produce the affected machinery and equipment domestically.

What challenge do Indian firms face with domestic production?

Indian firms face a structural disadvantage due to import duties of 5% to 25% on machinery parts.

Home / Business and Economy / China Export Curbs Hit Indian Manufacturers

China Export Curbs Hit Indian Manufacturers

19 Jan

•

Summary

China restricted exports of high-precision machinery and rare-earth components.
Indian firms are now producing essential equipment domestically.
Import duties of 5% to 25% create a structural disadvantage for Indian companies.

China Export Curbs Hit Indian Manufacturers

Indian manufacturing sectors are experiencing considerable strain on their supply chains following China's imposition of export restrictions. These curbs specifically target high-precision machinery, essential sub-systems, and equipment linked to rare-earth elements, vital components for many industries. The immediate impact has been a noticeable disruption in the flow of these critical goods.

In reaction to these export limitations, Indian companies have initiated efforts to localize production. This strategic shift involves developing and manufacturing the required machinery and equipment within India, aiming to mitigate the dependency on foreign supplies. This move signifies a proactive approach to securing essential industrial capabilities.

Despite the domestic production efforts, Indian manufacturers are encountering a new hurdle: import duties. These duties, varying between 5% and 25% on the parts needed for the machinery, create a structural disadvantage. This situation poses a challenge to their competitiveness and adds complexity to their supply chain strategies.