India needs to counter China’s informal restrictions on supply of critical inputs crucial for the electronics, solar, and EV sectors by diversifying its supply chains and sourcing more from partners like Japan and Korea, research body Global Trade Research Initiative has said.

New Delhi must also act quickly to boost domestic manufacturing and reduce its dependence on China, noted a report released by GTRI.

“Key companies hit include Foxconn, which makes iPhones in India and may face production delays. BYD, a major EV maker, and Lenovo, a leading laptop brand, are also likely to be affected. Indian firms like Tata Electronics, which partners with Apple, along with global suppliers like Pegatron, Compal, and Jabil, will struggle with delayed deliveries of essential components,” the report pointed out. 

Companies based in India have reported facing difficulties in sourcing equipment, components and skilled manpower from China, as per information shared by MeitY officials with the media.

Not on paper

While China has not officially announced any restrictions on its exports to India, the Indian industry is concerned about the constraints it has been facing in sourcing from the neighbouring country.

China’s informal restriction on exports to India could be its response to the curbs imposed by New Delhi on Chinese investments and visas, the report said, adding that it also signalled deeper geopolitical tensions and a looming trade war. 

“With the new Trump administration expected to take a more hawkish approach toward China, imposing higher tariffs and tightening export controls, China’s retaliatory actions are likely to intensify. This could include further expansion of export bans on critical minerals, creating supply chain disruptions and increasing costs for global industries,” the report stated.

Time to shift

India needs to prepare for long-term solutions to reduce reliance on Chinese imports by deepening its domestic manufacturing, it said. This can be achieved by lowering production costs, improving ease of doing business, and encouraging local value addition. 

India must also strengthen partnerships with Japan and South Korea to source high-quality components for electronics, solar panels, and EVs to build more resilient supply chains, the GTRI report added.