India Emerges as Electronics Export Powerhouse, Challenging China’s Dominance

A recent study highlights India’s increasing influence in electronics exports, challenging China’s dominance as manufacturers diversify supply chains in key markets. Notably, the impact is significant in the UK and US, where geopolitical tensions with China have risen. India’s electronics exports to the US, in comparison to China, surged from 2.51% to 7.65% in November last year, while the UK witnessed a rise from 4.79% to 10%.

To attract electronics manufacturers, the Indian government is offering substantial incentives, including tax cuts, rebates, simplified land acquisition, and capital support. This initiative aims to boost domestic manufacturing, facilitate exports, and foster global-scale partnerships for businesses. Notably, India hosts Samsung’s largest mobile phone factory, and Apple produces at least 7% of its iPhones in India through manufacturers like Foxconn and Pegatron.

The increase in electronic exports is attributed to Foxconn’s growing investment in India, according to Andrew Harris, an economist at Fathom Financial Consulting. While India’s progress in gaining market share is evident in the US and the UK, the report suggests a more gradual shift in Europe and Japan, indicating a move towards dual supply chains (China plus one).

The report shows that India’s electronics exports as a ratio of China’s was 3.38% in Germany and 3.52% globally.

Indian companies emphasize their role in multinational companies’ ‘China plus one’ strategy, aligning with the trend of developing backup capacity in other countries. This growing market share is a positive development with the nation’s ‘Make in India’ plan to boost job creation, expand exports, and enhance economic self-reliance by reducing import dependency.

Source: Bloomberg

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