Trump’s Misaligned Priorities
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- Where India Surpasses China in the iPhone Era: The Shifting Geography of Global Manufacturing For over a decade, “Made in China” was not just a label, it was the backbone of the global electronics economy. From iPhones to laptops, the world’s tech dreams were assembled in the industrial heartlands of Shenzhen and Zhengzhou. But the 2020s are rewriting that story. Apple’s decision to diversify its production base, moving portions of iPhone manufacturing to India, signals more than a logistical shift, it represents a profound geopolitical and economic realignment. The question is no longer whether Apple can make iPhones in India, but where India now surpasses China in this new iPhone era. China’s dominance over Apple’s supply chain began with the launch of the first iPhone in 2007. For nearly 15 years, factories run by Foxconn, Pegatron, and Luxshare Precision made China synonymous with efficient, large-scale, high-precision manufacturing. It wasn’t just cheap labor, it was a complete ecosystem. Engineers, logistics networks, and local suppliers worked in perfect sync. Foxconn’s Zhengzhou complex alone employed more than 300,000 workers, often referred to as “iPhone City.” For Apple, China offered predictability, speed, and scale that no other country could replicate. Yet, that very reliance became a vulnerability when trade wars, COVID lockdowns, and U.S.–China tech tensions disrupted the supply chain. As Washington and Beijing drifted apart, Apple’s strategy evolved from “Made in China” to “China + 1,” and India emerged as the most credible “+1.” India’s manufacturing story has been decades in the making. Through policies like Make in India and the Production-Linked Incentive (PLI) scheme, New Delhi sought to transform the country from an import-dependent market into a manufacturing powerhouse. The results are visible. Between 2020 and 2025, Apple’s key partners, Foxconn, Wistron, and Pegatron, expanded operations rapidly in Tamil Nadu and Karnataka. In the fiscal year 2024–25, Apple exported iPhones worth over $10 billion from India, a milestone that would have been unthinkable just a few years ago. What started as basic assembly has evolved into partial integration, with local component sourcing, logistics upgrades, and dedicated export zones. The iPhone is now not just assembled in India; it’s part of a broader industrial ecosystem that’s taking shape in South Asia. So, where exactly has India gained the edge? The first and most visible area is labor cost and workforce availability. Labor in India is roughly 30–40% cheaper than in China, giving manufacturers a strong incentive to relocate labor-intensive assembly operations. More importantly, India’s workforce is young, with a median age of just 28, compared to China’s aging demographic. The rise of industrial clusters like Sriperumbudur and Hosur has created a new generation of skilled technicians who can operate advanced robotics and precision assembly lines. Labor laws have also become more flexible, and unionization is lower than in China’s industrial centers, allowing production to scale quickly. India may not yet match China in productivity, but its combination of cost efficiency and scalability makes it the most promising manufacturing alternative. The second advantage is political and geopolitical alignment. India’s democratic governance and its strategic partnership with the United States and Europe give it a trust premium that China can no longer claim. Amid rising scrutiny of Beijing’s state surveillance, trade coercion, and data security practices, Western corporations see India as a more stable and ideologically compatible partner. As one analyst put it, “Apple’s China risk is now more political than logistical.” India benefits from that gap in trust, offering an open, rules-based system that reassures Western investors. The geopolitical climate has turned India into a manufacturing magnet not just for iPhones, but for semiconductors, electric vehicles, and defense technology as well. Third, India’s incentive-driven policy environment gives it a unique edge. Under the PLI scheme, companies receive direct financial incentives tied to production value and exports. Unlike China’s state-driven subsidies, which are now constrained by regulatory tightening and political scrutiny, India’s approach is market-oriented. States like Tamil Nadu and Karnataka compete to attract investment, offering streamlined approvals, improved infrastructure, and predictable tax regimes. The result is a pro-business manufacturing ecosystem that rewards scale and export orientation. This kind of transparent, incentive-linked policy has made India not only cost-effective but also financially attractive to global firms seeking long-term certainty. Fourth, India’s domestic market strength complements its export ambitions. With one of the world’s fastest-growing smartphone user bases, India offers Apple both production and consumption advantages. The company can follow a “produce where you sell” strategy, manufacturing devices locally while tapping into a middle-class consumer market that continues to expand. In contrast, China’s smartphone market is mature and politically restrictive for Western brands. Apple’s market share in China faces pressure from local competitors like Huawei, while in India, the brand represents aspiration and premium quality. This dual advantage, a booming domestic market and global export potential makes India strategically irresistible. Finally, there’s global perception and corporate comfort. For Western multinationals, India represents a “value-aligned” production base. It offers English-speaking managers, a growing tech-savvy workforce, and the rule of law. Most importantly, it minimizes reputational risk. Apple, which has faced criticism over working conditions in Chinese factories, can more easily champion a “Made in India” label without facing the same political and ethical scrutiny. In an era where brand image is tied to corporate ethics, that matters enormously. However, China’s dominance is far from over. Its industrial ecosystem remains unmatched, from precision component manufacturing to logistics efficiency. The entire supply chain, chips, sensors, microcontrollers, camera modules, and packaging, sits within a few hundred kilometers of each other. Ports, highways, and energy infrastructure enable just-in-time manufacturing at a scale India is still striving to reach. Chinese engineers bring decades of expertise in manufacturing discipline and process optimization. In contrast, India’s industrial growth is uneven, some states excel, others lag. India is ahead politically and demographically, but it still trails China in depth, precision, and maturity of manufacturing infrastructure. That’s why this shift isn’t a decoupling, but a diversification. Apple and Foxconn are not abandoning China; they are hedging against concentration risk. China will continue producing high-value components and managing complex logistics, while India focuses on large-scale assembly and exports. Over time, as India develops upstream industries, components, semiconductors, materials, its role will expand. The two countries will coexist within Apple’s ecosystem: China as the precision hub, India as the growth frontier. It’s less a rivalry than a recalibration of the global manufacturing map. The implications of this shift extend far beyond iPhones. The reconfiguration of supply chains is spurring a wave of regional industrial realignments. Vietnam, Thailand, and Indonesia are positioning themselves as complementary nodes in this new geography of production. India, however, stands out because of its scale, democracy, and strategic partnerships. Western economies, especially the U.S. and EU, now see India not just as a supplier, but as a partner in securing resilient, “democracy-based” supply chains that reduce dependence on authoritarian systems. Ultimately, India surpasses China not by replicating its industrial model, but by redefining what manufacturing power means in the 21st century. It’s not just about output; it’s about trust, flexibility, and alignment with the global order. India’s lead lies in its demographics, its democratic stability, and its policy predictability, the same factors that once made China irresistible, now working in India’s favor. The iPhone’s quiet relocation from Zhengzhou to Sriperumbudur tells a larger story about the future of globalization. “Made in India” is no longer just a slogan, it’s a strategy. The next decade will test how far India can climb up the value chain, but one thing is clear: in the iPhone era, the balance of manufacturing power is shifting, and India is no longer in China’s shadow, it’s standing on its own industrial stage.
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