India is trying to oust China in high-end manufacturing, with iPhone maker Apple and chipmakers eyeing its vast country and young population.
India has vast lands and a young population. Sayyad Hussain/AFP/Getty Images
With its vast land and large, young population, India is a natural alternative to China as the world’s factory.
Especially as India’s population is set to surpass China’s to become the world’s most populous country by 2023, the UN Department of Economic and Social Affairs said in a July report.
Tech giant Apple, for example, has already shifted part of its iPhone production to the Indian states of Tamil Nadu and Karnataka and is considering shifting its iPad production to the South Asian nation as well. JP Morgan analysts expect Apple to move 5% of its iPhone 14 to India by the end of 2022, they wrote in a September note. They assume that by 2025 one in four iPhones will be made in India.
India has a large labor pool, a long manufacturing tradition and government support to stimulate industry and exports. Because of this, many are exploring whether Indian manufacturing is a viable alternative to China,” Julie Gerdeman, CEO of supply chain risk management platform Everstream, told Insider.
However, the step is easier said than done.
India’s Prime Minister Modi has been working to attract foreign direct investment (FDI) since taking office in 2014, bringing FDI to a record $83.6 billion in the last fiscal year, according to government data.
But there are still significant hurdles — even though the Indian government is increasing its attractiveness to foreign investment, it’s still harder to do business in the country than in China, in part due to red tape, bureaucracy, and multiple interest groups prolonging decision-making.