How India is challenging China's dominance as new export powerhouse
India is steadily grabbing a piece of the electronics export market from China, especially in the UK and US, where political tensions have been on the rise. A recent study by Fathom Financial Consulting in London shows that India's electronics exports to the US, as compared to China, have jumped to 7.65% in November 2023 from 2.51% in November 2021. In the UK, India's share increased to 10% from 4.79% in the same period.
West's dual supply chain policy benefits India
However, India's success in capturing market share has been limited in the European Union and Japan. India's exports as a ratio of China was 3.38% in Germany and 3.52% globally. This suggests a shift toward dual supply chains rather than completely abandoning China-based production. Indian firms are highlighting their role in multinationals' 'China plus one' strategy, which involves building backup capacity in other nations. This aligns with 'Make in India' initiative, aimed at creating jobs, increasing exports, and reducing imports.
Government incentives and manufacturing growth
To lure electronics manufacturers, the Indian government is offering incentives like tax breaks, rebates, simplified land acquisition, and financial support. The aim is to boost domestic manufacturing for higher exports and help businesses expand globally through collaborations. India houses Samsung's biggest mobile phone factory globally and Apple makes around 7% of all its iPhones in the country via contract manufacturers Foxconn Technology Group and Pegatron Corp. The country is also on track to start making semiconductors starting this year.