Choking China+1?

Chinese government actions against Apple and Foxconn will not deliver

- AJAY SHAH

The Chinese government has introduced barriers to the Taiwanese company Foxconn shifting globalised manufacturing to India. This reflects China's weakness, not strength. At a tactical level, it delays a greater movement of high-skill activities from China to India. But at a strategic level, it increases the incentives for global firms to do less in China.

Two things are simultaneously true: World-class manufacturing requires deep knowledge, and that knowledge is available in many locations beyond China. The best organisations in India need to redouble their efforts at obtaining frontiers knowledge from abroad.

Let's look at imports of goods into the United States (US) while recognising that the cost of transportation from India is a bit higher than taking things across the Pacific. At its peak, the import of goods into the US from China was 15 times higher than from India. This was in 2007-09. From that point onwards, the ratio has steadily moved in India's favour. There was a period of slow gain for India from 2009 to 2018. From 2018, when the West initiated the "Third Globalisation", the gain for India accelerated. In March and April 2025, the import of goods from China into the US was only five times higher than from India.

Recognising that this was a time of peak disruption of imports from China, owing to the impending "Liberation Day", let's go a bit further back in time and we see China's sales of goods in the US as being about five times India's.