India has potential to capitalize on China’s manufacturing woes?

This is a question which is more significant for China than India – Can India capitalize on China’s manufacturing troubles?

In a recent move, the global tech giant Apple announced that it is going to manufacture its flagship iPhone 14 in India. It is going to be the first time when Apple  will produce a leading-edge phone in India just before its launch.

On the sidelines of the offers by top global companies supporting Make In India, India has to ensure proper arrangements since the companies require new sites for factories, but they may get distracted by red tape and tariffs policy of India.

On one hand one small step for Apple could prove to be a huge giant leap for the Indian economy. The recent announcement by Apple paves the way for many other top companies interested in joining Indian market in India specially the ones who are desperate to get out of China.

Apples decision of manufacturing its flagship iPhone 14 in southern India, has been supported by the supporters of the ruling Bharatiya Janata Party. Apple’s announcement has been considered as a vote of confidence in PM Modi’s efforts to boost Indian industrialization through production-linked subsidies and higher tariffs. But India’s state-led efforts towards the industrialization have been seen stumbling before and now also the certainty remains in question.

Like any other country, for India also, getting manufacturing right does matter. The software-services exports—$172 billion last year—by India may bolster Indian pride generating valuable foreign exchange. Nevertheless, it has thus far generated relatively few job opportunities. Last year, In a country of 1.4 billion, Indian IT industry directly employed only 5.1 million people. No large nation has so far made such a journey from poverty to prosperity without robust manufacturing.

In India the successive governments have not been able to come up with policies that could facilitate the movement of tens of millions of farm workers to more-productive factory jobs. Looking into this direction would also strengthen the manufacturing potential of India.