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South Asia India's rise as a manufacturing powerhouse making China nervous as geoeconomic advantage shifts

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South Asia India's rise as a manufacturing powerhouse making China nervous as geoeconomic advantage shifts
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India's rise as a manufacturing powerhouse making China nervous as geoeconomic advantage shifts​

Story by FP News Desk
• 21h•
3 min read

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China appears to be getting nervous about India's rising stature as a manufacturing hub. File image

China appears to be getting nervous about India's rising stature as a manufacturing hub.

As India increasingly attracts global supply chains and manufacturing investment, tensions with China are mounting, with signs that Beijing may be responding with quiet but targeted disruptions to India’s industrial ambitions.

From electronics to toys, India's growing manufacturing base is drawing international interest, including from companies seeking to reduce their reliance on China. At the same time, Indian authorities and industry insiders report signs of economic pushback from Beijing: from delays in shipping machinery to the sudden withdrawal of skilled Chinese workers.


India gains from supply chain realignment

India has emerged as a key beneficiary of global efforts to diversify production lines away from China. Several international toy manufacturers, including Italy’s Dream Plast, Microplast and Incas, shifted part of their operations to India last year. The result has been a sharp increase in Indian toy exports.

The Indian government’s $2 billion Production-Linked Incentive (PLI) scheme has also played a major role in luring global players. Earlier this year, Taiwanese electronics giant Asus began assembly operations in Manesar in partnership with VVDN Technologies. HP joined hands with India’s Dixon Technologies to produce laptops and personal computers locally.

Following the United States’ decision in April to impose additional tariffs on Chinese imports, even Chinese companies began seeking out Indian suppliers to fulfil American orders. At the Canton Fair in Guangzhou, Indian exporters reported being approached by Chinese firms offering commission-based deals to re-route their products through India.


Machinery delays and worker pullouts

As India’s industrial profile has risen, so too have signs of discomfort in Beijing. Indian government officials and companies have pointed to apparent Chinese efforts to slow down the delivery of crucial equipment needed for electronics manufacturing.

In January, India’s Secretary of Electronics and Information Technology, S Krishnan, said the government had received feedback from manufacturers, including Apple supplier Foxconn, about delays in the shipment of capital equipment from China. According to industry sources, the machinery had been held up at Chinese ports for several months without formal explanation.

While no official restrictions have been announced by China, Krishnan acknowledged the possibility that these holdups could be the result of informal directives from Chinese authorities.

Further complicating matters, Foxconn repatriated several hundred Chinese engineers and technicians from its iPhone assembly units in southern India. Though Foxconn and Apple notified Indian officials, the move came without a clear explanation. The timing, officials said, suggested that it may have been more than a routine operational adjustment.


Rare earths and regulatory squeeze

In April, China introduced tighter export controls on rare earth magnets, materials essential for electric vehicles and electronics. The new rules require exporters to obtain government licences and provide detailed end-use certificates before shipments are approved.

India, which imported 460 tons of rare earth magnets in the previous financial year, almost all from China, had planned to increase imports to 700 tons this year. The restrictions are likely to significantly impact India's auto sector, which is dependent on these components for electric mobility and other high-tech applications.

While the export curbs were officially described as part of China’s broader response to US trade measures, analysts believe India is among the countries likely to be caught in the crossfire.



Silent sanctions and the race for talent

Most recently, Beijing has reportedly instructed local governments and regulatory agencies to quietly discourage the outflow of advanced technology and technical talent to countries like India and Vietnam. According to Bloomberg News, the policy has not been publicly announced, but has been interpreted in Indian policy circles as a form of “silent sanction”.


These measures appear designed to restrict the mobility of both tools and talent essential for complex manufacturing-- sectors in which India is beginning to position itself as a competitor.

As global manufacturers diversify and India gains momentum, Beijing’s unease is becoming harder to ignore. The geoeconomic advantage, long held by China, may be slowly shifting across the Himalayas.
 
India is doing very well in automobile. India has received so many inquiries for Vande Bharat and other train sets. After operation Sindoor, many nations have shown the interest in Indian weapon platforms. First TATA airbus plane is going to roll out in short time from TATA airbus facility. India need to focus on Electronics and plane manufacturing.
 
India is doing very well in automobile. India has received so many inquiries for Vande Bharat and other train sets. After operation Sindoor, many nations have shown the interest in Indian weapon platforms. First TATA airbus plane is going to roll out in short time from TATA airbus facility. India need to focus on Electronics and plane manufacturing.
Let's not talk about other countries. Has the Indian Air Force bought Indian-made weapons?
 
I really don't know what Indians make. After all, India's exports are only low value-added raw materials and agricultural products.

oh Recently, China has restricted the export of specialty fertilizers to India. It may have some impact on Indian agriculture.

Screenshot_20250705_184351_com_microsoft_emmx_ChromeTabbedActivity.jpg
 
India exported 2 lakh crore INR mobile last year lead by apple. Now Apple manufactures double the mobiles in India compared to China.
In other news - the sun rose in the West today....

Jokes aside, little of iPhone parts (except maybe the phone casing by Tata) are made in India, Indian iPhones are all made with parts imported from China (I'd say more than 90%).

These are idle boasts by Hindutva Indians, as usual.

Please prove me wrong if you can.
 
India's Vande bharat trainset is in great demand across the world. Many countries are Interested.

 
I really don't know what Indians make. After all, India's exports are only low value-added raw materials and agricultural products.

oh Recently, China has restricted the export of specialty fertilizers to India. It may have some impact on Indian agriculture.

View attachment 19625

China is top Importer of India's cheapest rice. Those who can not produce their food grains lectures others. Even India's chepest rice is batter than Chinese anything including their plastic rice and gutter oil. Chinese will have something decent to eat.

 
In other news - the sun rose in the West today....

Jokes aside, little of iPhone parts (except maybe the phone casing by Tata) are made in India, Indian iPhones are all made with parts imported from China (I'd say more than 90%).

These are idle boasts by Hindutva Indians, as usual.

Please prove me wrong if you can.

May be. While being a spokesperson of China, you do not know that you are reducing China from a manufacturer to part supplier. Which one is batter? TO manufacture finish goods or supplier of component?
 
Don't drink Indian water! Indian water is garbage water! It is entirely composed of Escherichia coli!


Screenshot_20250722_231621_com_microsoft_emmx_ChromeTabbedActivity.jpg
Screenshot_20250722_231652_com_microsoft_emmx_ChromeTabbedActivity.jpg


@Bilal9 @Saif bro. I'm glad to see Bangladesh win against India again
 
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May be. While being a spokesperson of China, you do not know that you are reducing China from a manufacturer to part supplier. Which one is batter? TO manufacture finish goods or supplier of component?
Let's focus on India's parts localization effort for making cars, which is an abject failure. I don't shill for China, but the facts speak for themselves, and most of those come from Indian media itself.

As of 2025, India's automotive industry aims to achieve around 25% parts localization in vehicle assembly, although the localization of electronic components remains a significant challenge due to reliance on imports amid the drive toward EV cars with heavily embedded electronic components, both of which spell trouble for parts localization in India.

The Indian government is actively promoting domestic parts production (instead of Chinese parts imports) to reduce this dependency by its "Make in India" subsidies, a program which has also become an abject failure. You can't just throw money at a problem and not provide deeper policy support.

The "Make in India" initiative is widely considered a qualified failure by Indian policy thinktanks, as it has not met its ambitious goals, such as increasing the manufacturing sector's contribution to GDP or creating the promised number of jobs. Instead, the share of manufacturing in GDP has decreased, and job creation has fallen short of expectations.




 
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Don't drink Indian water! Indian water is garbage water! It is entirely composed of Escherichia coli!


View attachment 20428View attachment 20429

@Bilal9 @Saif bro. I'm glad to see Bangladesh win against India again
Thanks for the link. :)

Despite virulent Indian propaganda, Bangladesh is literally a safer place to live and work compared to India.

Water quality matters to manufacturing - it is one of the primary health indicators for a productive manufacturing oriented country. People are the main factors in manufacturing, and if you can't keep your people healthy, then manufacturing will suffer.

Our open defecation is near zero compared to India, which has 60% plus of it. Hygiene is built into the popular culture unlike India. Every house (even those in villages) have a toilet.

Still - Bangladesh has a long way to go to achieve China's level of societal discipline, hygiene and living standards. A work in progress I guess.

In any case - I don't think I should criticize Indians for having only 25% parts localization in their Auto Industry, as ours in Bangladesh is a lot less. However one can say Indian market is eight times larger and they can easily make a case for way higher parts localization.

If Chinese can make 100% parts localization, and Indian auto market and population is as large as China's - what is setting India back so much?

Even if you export large numbers of cars from India, and if you make assembled cars from all Chinese parts, Chinese are keeping most of the high level value addition (for making said parts like electronics, ECUs, engine components and transmissions).

All India is doing is bolting things together, which requires very little skill. Like one of the Pakistani brothers said, this is useless tailoring or "Darzi business".
 
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