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China’s export restrictions part of trade war strategy: GTRI

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Kirtika Suneja

, ET BureauLast Updated: Jan 16, 2025, 10:11:00 PM IST

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India needs to enhance partnerships with Japan and South Korea to source electronic components due to China's export restrictions. This move follows India’s curbs on Chinese investments and visas, leading to disruptions in electronic, solar, and EV sectors. Such measures highlight the broader trade war and geopolitical tensions between India and China.

India must strengthen partnerships with Japan and South Korea to source high-quality components for electronics, solar panels, and EVs to help cut reliance on China amid Beijing’s restrictions on export of key inputs and machinery, think tank Global Trade Research Initiative (GTRI) said Thursday.

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Cautioning that China’s export restrictions are part of a broader trade war strategy and its response to India’s curbs on Chinese investments and visas, it said that Indian firms in electronics, solar, and EV sectors are facing delays and disruptions.

“This also signals deeper geopolitical tensions and trade war. We hope India-specific restrictions go away soon as they will also hurt China,” GTRI founder Ajay Srivastava said.

He added that while these measures impact India’s electronics, solar, and EV sectors, they are also harmful to China’s own manufacturing and exports.

“Indian firms in electronics, solar, and EV sectors are facing delays and disruptions as China blocks exports of inputs and machinery,” it said, adding that New Delhi must stay firm against unreasonable demands from China and focus on building local manufacturing.

Srivastava said India is particularly vulnerable to China’s export restrictions, as many of its industries depend on Chinese machinery, intermediate goods, and components. India's imports from China increased to $101.73 billion in FY24 from $98.5 billion in FY23. In 2020, India made it mandatory for countries sharing land borders with it to seek its approval for investments.

With US President-elect Donald Trump likely to introduce new tariffs on China, Beijing has imposed export curbs on critical minerals and high-tech equipment. In 2024, China’s merchandise exports reached $3.6 trillion, with a trade surplus of $992 billion. This highlights that despite the US efforts to reduce reliance on Chinese goods, China remains a key player in global supply chains, GTRI said.

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