Alarmed by quick progress of the Make in India project of the Indian government, China is trying to scuttle the progress of the showpiece of India’s domestic manufacturing story: Apple production. Since India’s electronics manufacturing has picked up pace only in recent years, it relies on China for intermediate goods, the high-tech machinery used to produce electronic items which is not available readily in India yet. It seems China is now not willing to send those machines to India.
Sectors with heavy reliance on China, such as electronics, solar panels and electric vehicles (EVs), are facing severe challenges in getting capital equipment including hi-tech machinery, with China almost halting supplies, industry executives have told ET. Beijing’s move, experts said, is aimed at stalling the manufacturing expansion of the likes of Apple supplier Foxconn, EV maker BYD and laptop major Lenovo in India. China’s protectionist move not only increases costs for the manufacturers here, but also hurts the whole expansion exercise, another executive told ET.
China Plus One, the strategy under which Western manufacturers in China began diversifying their supply chains to other countries such as India and Vietnam after Covid disruptions in China and worsening China-US ties, now faces hurdles with China delaying the transfer of equipment to India. India has leveraged the China Plus One strategy with mega funding measures such as Production-Linked Incentives (PLI) scheme for various sectors.
