In a noteworthy shift, India is making significant strides in the global electronics exports arena, gradually eroding China’s dominance. As geopolitical tensions prompt manufacturers to diversify supply chains, India emerges as a key player, particularly in markets like the UK and the US. A recent study by London-based Fathom Financial Consulting highlights India’s expanding presence, signaling a shift in the dynamics of global electronics trade.
India’s Impact on Electronics Exports: A Geopolitical Turn of Events
The study reveals a notable impact on China’s electronics export dominance, with India gaining ground in key markets, notably the UK and the US. Geopolitical tensions have spurred a reevaluation of supply chain strategies, with manufacturers seeking alternatives to the traditional reliance on China. India’s electronics exports to the US have seen a significant rise, reaching 7.65% in November 2022, up from 2.51% in the same period the previous year. In the UK, the share has surged to 10% from 4.79%.
Incentives Driving India’s Ascent: Government Initiatives Propel Export Growth
The Indian government’s proactive measures, including enticing incentives such as tax cuts, rebates, streamlined land acquisition, and capital support, have played a pivotal role in attracting electronics manufacturers to the country. The objective is to not only bolster domestic manufacturing but also foster an environment conducive to global exports, supporting businesses in scaling up through strategic partnerships. India is already home to major manufacturing facilities, including Samsung Electronics Co.’s largest mobile phone factory and Apple Inc.’s production of a significant portion of iPhones through contract manufacturers Foxconn Technology Group and Pegatron Corp.
Foxconn’s Role in India’s Export Surge: A Significant Factor
The study suggests that the surge in India’s electronic exports is closely tied to increased investment by Foxconn in the country. Andrew Harris, an economist at Fathom Financial Consulting, notes that Foxconn’s expanding footprint in India has likely contributed to the rise in India’s market share.
Global Landscape: India’s Dual Supply Chain Approach
While India’s progress is more pronounced in the UK and the US, its impact in Europe and Japan is more limited. The study suggests a trend toward a dual supply chain strategy, commonly referred to as ‘China plus one,’ where manufacturers maintain backup capacity in other countries while still retaining production in China.
India’s ‘Make in India’ Triumph: Boost for Prime Minister Modi’s Economic Vision
India’s increasing market share in global electronics exports aligns with Prime Minister Narendra Modi’s ‘Make in India’ initiative. The plan aims to create jobs, expand exports, and enhance economic self-reliance by reducing dependence on imports. The growing success in the electronics sector serves as a testament to India’s resilience and adaptability in the evolving global trade landscape.
