China pushback on India's GVC ascent

To stay on course, the govt must contain costs before ambitions derail. In the longer run, investing in resilience is required

- RISHI RAJ

CHINA'S RECENT MOVE to recall its engineers from Foxconn's India plant, where Apple's iPhones are assembled, had to happen sooner or later. Consider the facts: India is emerging as a genuine contender in electronics manufacturing. Obviously, Beijing is watching that rise with increasing discomfort, and Apple is the most high-profile symbol to target, the reasons for which are not hard to find.

At the end of FY25, India's share in global iPhone production reached 20%, up from 14% the previous year. Four years ago, that number was zero. Apple is now planning to shift more than 25% of its iPhone production to India by 2026. If one looks beyond Apple at the initiatives in the larger electronics global value chain (GVC), substantial progress has been made. Five major semiconductor projects worth ₹1.5 lakh crore are underway, backed by the likes of Tata Electronics, Micron, and CG Power. These span the full chip value chain, from design and fabrication to assembly, testing, and packaging.

Roughly, ₹60,000 crore from the government's incentive outlay of ₹76,000 crore has already been committed.

The linkages are slowly taking roots. For instance, Apple's expansion plans go beyond iPhones. The company is reportedly exploring with Micron and Tata to locally source $12 billion worth of semiconductors by 2026, in line with its India-based production targets. That's no small vote of confidence as Apple alone consumes about 26% of Taiwan's TSMC's global chip output.