Government’s Gold Compound Import Restriction Hits Electronics Manufacturers Hard Over 21,000 Jobs at Risk

July 7, 2025 – India’s electronics manufacturing sector is grappling with a severe disruption due to simultaneous challenges: ongoing restrictions by China on rare earth magnet exports and recent import curbs on gold compounds. These twin issues are threatening production continuity, investments, and employment across the sector.

Gold compounds, especially Potassium Gold Cyanide, are key components in the production of high-end electronic components, such as semiconductors, printed circuit boards, and connectors, due to their superior conductivity.

However, the Directorate General of Foreign Trade (DGFT) issued an order on June 17, reclassifying these imports from the “free” list to the “restricted” list.

Elcina Flags Job Loss Concerns

According to the Electronic Industries Association of India (Elcina), more than 21,000 jobs are at risk in Noida and South India, primarily in the audio electronics segment. This comes amid an already strained supply chain, with China tightening the export of essential rare earth materials critical for electronic components.

Industry Warns of Investment Deterrents

Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), expressed concern over the growing uncertainty created by the gold compound import restrictions.

“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,” Mohindroo said.

He warned that the policy unpredictability could deter investment, especially in critical sub-assembly areas where gold-based inputs are essential.

Key Components at Risk

Gold compounds are indispensable for manufacturing several vital components, such as:

• Printed Circuit Boards (PCBs)
• Camera Modules
• Mechanical Parts
• Connectors

These components typically undergo gold-based plating processes, without which the production line risks serious delays or halts.

Push for Localisation

The industry is calling for urgent intervention to resolve the import hurdles while pushing ahead with the Electronics Component Manufacturing Scheme (ECMS). This initiative aims to localise key component production and reduce dependency on imports, particularly for items such as PCBs and connectors, which are currently at risk due to gold compound shortages.

Outlook

The sector faces this double whammy, and timely policy support is required to address the issue through supply chain intervention. Otherwise, the projected growth of India’s electronics manufacturing ecosystem would be significantly reduced.

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