Already reeling under shortage of rare earth magnets after China’s restrictions on the minerals in April, India’s electronics manufacturing sector has hit another roadblock with curbs placed on import of gold compounds.
In an order dated June 17, the Directorate General of Foreign Trade (DGFT) reclassified imports of colloidal precious metals and compounds from “free” to “restricted” category, hitting a double whammy to the electronics makers and endangering the country’s ‘Make in India’ goals.
While rare earth magnets have diverse utility, ranging from computer chips and electronic components to electric vehicles, wind turbines, and medical equipment, gold compounds, though used in trace amounts, are key raw materials that help improve the flow of electronic current in motherboards, semiconductors, as well as other electronics.
Also Read: Indian auto reps await China’s consent for rare earth meeting
The move has invoked alarm in the electronics manufacturers, prompting the India Cellular and Electronics Association (ICEA) to write a letter to the Ministry of Electronics and IT, saying that the import restriction has brought in uncertainty in the efforts of the industry to scale up domestic electronics manufacturing.
“The recent import restriction has affected the availability of this critical material. This has introduced uncertainty in light of ongoing efforts to scale up electronics manufacturing. The resulting policy unpredictability may also deter investment in critical sub-assembly segments where these inputs are essential,” said ICEA Chairman, Pankaj Mohindroo.
Urging the government to resolve the import of gold compounds, Mohindroo said the Electronics Component Manufacturing Scheme (ECMS) uses gold-based plating materials to manufacture key components such as printed circuit boards, camera modules, mechanical parts and connectors.
Electronic component makers body, Elcina, has also been up in arms since the import curbs and complained to the Ministry of Electronics and IT in a letter that customs authorities have begun holding consignments of Potassium Gold Cyanide (GPC) and similar materials, resulting in significant delays to production lines and disruption to supply chains in the electronics manufacturing sector.
Elcina’s secretary general, Rajoo Goel, said that Potassium Gold Cyanide, colloidal precious metals, and other compounds, which are used as critical raw materials in the manufacturing of electronic components, including connectors, high-end PCBs and semiconductors, among others, are consumed entirely within the manufacturing process and do not enter the bullion trade or precious metal markets.
"These inputs are imported on an actual user basis; they do not enter the bullion trade or precious metal markets. Their import is critical for captive consumption by electronics manufacturers and involves their usage in miniscule quantities (trace usage) in finished goods," he said.
Elcina has warned that import restrictions will adversely impact the ease of doing business for electronic components manufacturers and 'Make in India' goals of the government's flagship schemes like ECMS, PLI and SPECS.
In April 2025, China implemented strict export licensing on rare earth elements like terbium and dysprosium – key inputs for high-level performance NdFeB (Neodymium-Iron-Boron) magnets used in consumer electronics.
Elcina also estimates that over 21,000 jobs in the country’s audio electronics segment are at risk due to China’s restrictions on export of rare earth metals.
Electronics manufacturing services companies are also facing problems in importing capital goods from China, which is delaying their production.
Recently, iPhone maker Foxconn had to send back hundreds of Chinese technology professionals who were helping the company’s India unit in expansion of manufacturing capacity and training professionals for handling machines.
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