Context of Export Restrictions:
- China’s export restrictions on germanium and gallium have created challenges for global industries, including India’s, particularly in electronics and semiconductor manufacturing.
- Germanium is a critical mineral used in semiconductors, fibre optic cables, and solar panels, making it vital for India’s tech and infrastructure sectors.
- Over half of the world’s germanium production comes from China, and export restrictions have had a significant impact on India’s reliance on imports of this mineral.
Relevance : GS 3(Minerals ,Technology)
India’s Dependency and Issues:
- India has no domestic production of germanium and is fully reliant on imports.
- Due to export restrictions, India has been sourcing germanium through suppliers in the United Arab Emirates, leading to inflated costs for Indian businesses.
- This dependency has exposed vulnerabilities in India’s supply chains, particularly in high-tech industries.
Grievances and Diplomatic Engagement:
- The Indian Embassy in Beijing noted that germanium was the only element raised by Indian industry players in complaints about China’s export restrictions on rare earth elements (REEs).
- While germanium is not classified as a rare earth element, it plays a critical role in technologies relying on advanced materials, adding complexity to India’s supply chain.
- India is actively engaging with the Chinese government to resolve these issues through formal communications and meetings with Chinese officials, although details about specific negotiations remain undisclosed.
Impact on Electronics Manufacturing:
- Germanium oxide is integral to the production of fibre optic cables used in global communications networks.
- Restrictions on germanium exports have disrupted the availability of critical components needed for optical fibre production, affecting sectors beyond just electronics.
Broader Political and Economic Context:
- The trade tensions with China come amid cooling relations and growing concerns over China’s trade practices, including export curbs and travel restrictions.
- For example, Foxconn, Apple’s contract manufacturer for iPhones, faced obstacles with personnel travel and machinery transport between China and India, reflecting broader challenges in the bilateral relationship.
- These issues underscore the growing complexity of India-China economic relations, which are being impacted by both geopolitical tensions and economic interdependencies.
Conclusion:
- The export restrictions on germanium exemplify how resource control by China can affect India’s tech sector and supply chain stability.
- As India navigates this challenge, its diplomatic engagement with China will be crucial in mitigating the effects of resource monopolies and ensuring more secure and diversified supply chains for essential raw materials like germanium.
