India has been striving to become a manufacturing hub for the world for a long time now. And it looks like electronics may be India's best chance to hit the big time in manufacturing globally
Let’s get this out of the way at the outset: India lags China by a fair distance when it comes to manufacturing prowess: The latter is way ahead in terms of productivity, and manufacturing’s contribution to (a much larger) economy is a little over 25 percent as against just under 15 percent for India.
The gap has prompted a section of gurus to suggest that India should stick to what it does best to propel economic growth—services, which accounts for over half of GDP.
They’re not wrong. Yet, a clutch of recent developments may perhaps signal that India shouldn’t be giving up on the growth engine of manufacturing, but instead stoke it further.
Let’s start with the recent decision of Apple Inc to search for production avenues outside of China. Around mid-May, The Wall Street Journal reported that the maker of iPhones, iPads and MacBooks had told some of its contract manufacturers that it wants to increase production outside China because of the strict anti-Covid measures in that country. A month earlier, the Cupertino-headquartered company had stated that it began making the latest iPhone 13 in India, out of a Foxconn factory near Chennai.
That’s one trigger for Forbes India deciding to shine a light on Indian manufacturing in this fortnight’s issue. As Manu Balachandran writes in ‘An i on India’: About 70 percent of the Apple smartphones sold in the country are made in India. And India could account for as much as 7 percent of Apple’s global manufacturing by the year-end, up from 3.1 percent in 2021. A reality check: Over 90 percent of Apple products are still made in China.
(This story appears in the 15 July, 2022 issue of Forbes India. To visit our Archives, click here.)