Friday 02 / May / 2025
Building on its favourable demographic dividend, favourable government political and policy environment, and rising global desirability as an R&D and production destination, along with a changing geopolitical climate, India has experienced rapid growth in its manufacturing sector over the last few years.
With extraordinary expansion in its manufacturing landscape, many experts have referred to the present scenario as the golden era of India’s manufacturing.
First, the policy environment, focusing on Made in India, accompanied by Production-linked incentives, has helped in developing its electronics industry, which presently attracts big investments, while providing impetus to local production. Launching itself as the global hub for electronics manufacturing, India’s electronics production is likely to reach USD 300 billion by next year.
India has emerged as the second-largest mobile phone producer in the world. Moreover, experts predict that India’s share in global iPhone manufacturing will at least double in 2025, from 14-15% currently. One major reason behind this expected growth would be the manufacturing shift of Apple Inc. to India from
China to diversify its supply chain. The shift is an obvious result of the growing geopolitical tensions between China and the US, and the resulting tariff tiffs.
India's electronics production has almost doubled from US$ 48 billion in 2017 to US$ 101 billion in 2023, driven mainly by mobile phones (accounting for 43% of production value). Besides, under the Semicon India Program, Indian has made rapid advancements in the development of a sustainable semiconductor and display ecosystem. By the end of 2025, India’s first indigenous semiconductor.
Moreover, rising labour costs in China, apart from geopolitical issues, provide India and its demographic dividend a fertile chance to welcome the shift in global manufacturing hub to New Delhi.
Second, at the global stage, India has galloped up its foreign technical collaborations with the US, Germany, and Japan for mobile phones, electronics, and food processing.
For instance, Tata Electronics Private Limited (TEPL) is partnering with PSMC (Taiwan) to establish a semiconductor fab facility, and CG Power and Industrial Solutions Limited will be setting up an OSAT facility in India with an investment of Rs. 7,584 Crore, with a joint venture partnership with Renesas Electronics America Inc., USA, and STARS Microelectronic, Thailand.
Moreover, with the strengthening of relations between New Delhi and the Global South, India has already emerged as a major trading partner with the Global South for pharmaceuticals and telecommunication equipment.
Thirdly, and circling back to the issue of searching for alternatives to China, India shines as a very palatable case for various reasons. Its large, technologically educated workforce, with cost-effectiveness in terms of cheaper labour, and its non-controversial and non-confrontational (and very amicable) geopolitical and diplomatic relations with the rest of the world (except its close neighbour), India is a crucial China plus one alternative. In technology manufacturing, many international companies look towards India as a fertile ground due to its favourable policies, booming consumer market, and the nation’s remarkable.
Over the past few years, “India’s manufacturing sector has witnessed major new investments in production facilities by leading multinational corporations like Siemens, GE, Philips, Samsung Electronics, PepsiCo, ABB, Micron, etc.”, making it a rising China plus one hub.
With these advantages and improving relations with the Global South, India provides an avenue for changing the trade order, which relies on “Team China” as the crucial provider of electronics. Given the expanse of Chinese presence and (possibly not so benevolent) influence of China in the Global South, there are rising international political economy concerns.
This becomes highly important with changing times when scholars are raising concerns over China’s growing digital expansion in the Global South, with a looming narrative about Chinese digital authoritarianism and “China’s growing digital presence for digital governance at both global and national levels”.
