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China limiting exports of raw materials

Context: The Chinese Ministry of Commerce announced that it would implement export controls on items related to gallium...

Context: The Chinese Ministry of Commerce announced that it would implement export controls on items related to gallium and germanium.

Curbs Imposed by China
  • Specific Licensing Requirement: Export operators must acquire a specific license to restrict the export of gallium and germanium.
  • Application Process: Operators need to provide details of importers, end-users, end use, and the original export contract. Exporting without permission will be deemed a violation, leading to administrative penalties and potential criminal charges.
Regulations announced by China:
  • Export operators would now have to acquire a specific licence.
  • The primary contention lies with the application process that requires operators to list the importers, end-users and end use.
  • Countermeasures: Some Chinese officials have suggested that the export controls are just the beginning, and China may escalate its countermeasures if restrictions intensify in the future.
Why Gallium and Germanium are important?
  • Gallium is used to make gallium arsenide which forms the core substrate for semiconductors.
    • They are used to manufacture semiconductor wafers utilised in integrated circuits, mobile and satellite communications (in chipsets), and LEDs (in displays).
    • It is also used in automotives and lighting and for sensors in avionic, space and defence systems.
  • Germanium is used in fibre-optic cables, infrared imaging devices (used by enforcement agencies for surveillance, target acquisition and reconnaissance, particularly in the dark) and optical devices (to improve the ability to operate weapon systems in harsh conditions).
    • They are also used in solar cells for their ability to withstand heat and higher energy conversion efficiency.
Impact on India:
  • India is totally import-dependent for germanium and gallium.
  • The Chinese export controls are expected to have a short-term impact on India and its industries due to the disruption in immediate supply chains.
  • The increased prices resulting from the export control order would affect the cost and availability of chips, potentially impacting India’s chip-making plans.
  • The long-term consequences for India’s chip-making plans and industries will depend on several factors, including alternative supply sources, domestic semiconductor production capabilities, and strategic partnerships like the India-U.S. Initiative on Critical and Emerging Technology (iCET).
  • Available alternatives for India:
    • The two critical minerals are present as by-products in the processing of zinc and alumina.
    • Efforts should be made to focus on waste recovery from zinc and alumina production.
    • Moving attention towards available substitutes such as indium and silicon could also be considered.
    • There is some good quality silica feedstock available in India, but that has to be converted to metallurgical-grade silicon for which we would require lower power (rates).
What is the iCET?
  • The iCET was announced by India and the US in May 2022 and was officially launched in January 2023 and is being run by the National Security Council of both countries.
  • Under iCET, both countries have identified six areas of cooperation which would include co-development and co-production, that would gradually be expanded to QUAD, then to NATO, followed by Europe and the rest of the world.
  • Under iCET, India is ready to share its core technologies with the US and expects Washington to do the same.
  • It aims to promote collaboration in critical and emerging technology areas, including AI, quantum computing, semiconductors, and wireless telecommunication.
  • Focus Areas of the Initiative:
    • AI research agency partnership.
    • Defense industrial cooperation, defense technological cooperation, and defense startups.
    • Innovation Ecosystems.
    • Semiconductor ecosystem development.
    • Cooperation on human spaceflight.
    • Advancement in 5G and 6G technologies, and adoption of OpenRAN network technology in India.

China limiting exports of raw materials,China limiting exports of raw materials

Read Also : U.S. – China Relations: Decoupling to De-Risking

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