As Multinational Companies Shift Base To India, Will It Finally Challenge China?

China, once a hub for international multinational companies, is losing out on business investments. International businesses no longer see a bright future in China as a result of the country’s disputes with Taiwan and the US, labour shortages, and government pressure to transfer technology to Chinese firms. In terms of trade and manufacturing, these corporations now view India as a viable substitute for China. From Apple to Foxconn, every international corporation views India as a haven. China still leads the world in manufacturing, but India is now posing a serious threat to China’s empire.

India not only has a sizable labour population, but its home market is second only to China’s globally, according to a Wall Street Journal article. The democratic system in India is also alluring to the governments of the West. The Indian government is making every effort to turn the country into a centre of manufacturing. India is emerging as a key power in the manufacturing industry.

India is outpacing other rising countries like Mexico and Vietnam in terms of industrial exports, which are expanding quickly. In comparison to 2018, India’s electronics exports have now tripled to $23 billion. Only 9% of the total number of smartphones produced worldwide in 2016 were created in India, according to a survey by Counterpoint Technology Market Research. India’s share will be 19% this year. The Central Bank of India reported that from 2020 to 2022, foreign direct investment in India averaged $42 billion yearly. In less than ten years, it will double.

The Danish business Vestas had two factories in Sriperumbudur, Tamil Nadu, by the year 2021. The company, which is the largest producer of wind turbines in the world. currently operates six production lines in India and exports its goods all over the world. According to Charles McCall, senior director of Vestas Assembly India, the corporation is establishing its manufacturing facilities in other nations besides China.

Apple, the maker of the iPhone, is gradually moving its operations from China to India. Apple had developed its state-of-the-art supply chain in China over the previous fifteen years. Apple’s presence in China has significantly boosted the country’s manufacturing industry. Apple, though, reportedly is moving out of China. Apple only assembled inexpensive goods in India up to 2017. However, soon after its release, Apple began producing the flagship iPhone 14 in India.

According to JP Morgan, India will produce a quarter of all iPhones by 2025. Foxconn, Apple’s primary supplier, also operates a facility in Chennai.