Even as US tariffs squeeze exporters and heighten trade uncertainty, electronics, rare earths and FDI may get a lift as India signals a reset with China.
India could secure gains in electronics manufacturing, rare earth supplies, and foreign investment as Prime Minister Narendra Modi met Chinese President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation summit in Tianjin on Sunday.
According to several reports, the meeting marks an effort to stabilise relations after years of strain, pointing to opportunities in critical supply chains.
Indian firms heavily depend on China for electronics, including printed circuit boards, display modules, batteries, and camera components. Several electronics manufacturing service (EMS) providers have pending proposals for joint ventures with Chinese suppliers, including technology transfer for local production.
A report by Moneycontrol says easing approvals could accelerate India’s ambition to deepen domestic value addition.
Rare earth magnets, vital for electric motors, batteries, and high-end electronics, remain another sensitive area. Earlier Chinese restrictions disrupted auto and electronics output, triggering warnings of production delays.
While recent shipments have resumed after diplomatic engagement, industry experts caution that Beijing may reintroduce curbs by October.
The thaw could also open doors for Chinese investment. Under current rules, all proposals from countries sharing land borders with India require prior approval. Officials now hint that restrictions may be relaxed, allowing up to 24 per cent Chinese FDI in select sectors.
According to The Economic Times, business visas for senior Chinese executives are also likely to be restored, enabling companies such as vivo, Oppo, Xiaomi, and Haier to post leadership teams back in India after years of remote management.
The shift comes as India faces rising tariff pressures from the United States, which last week doubled duties on Indian goods to 50 per cent. With Washington hardening its stance, New Delhi is seen recalibrating trade ties with Beijing to secure critical inputs for industry and protect growth in electronics and advanced manufacturing.
