India’s Modi government has been touting the “make in India” plan since 2014, with the ultimate goal of making India the center of the global manufacturing industry. That strategy appears to be gradually coming to fruition.
India’s smartphone market is dominated by low-cost Android phones from domestic players like Lava, Intex, and Micromax, as well as Chinese firms like Xiaomi, Oppo, Lenovo, and Vivo. In the past, the Indian firms had trouble competing with Chinese companies on quality because they lacked access to a strong local supply chain, and many local factories like Micromax’s depended on Shenzhen subcontractors to meet their numbers. But as India’s domestic manufacturing industry grows, that’s becoming less true.
As far as the giants Apple and Samsung go, the Chinese consumer market remains crucially important. But their changes in supply chain strategy pose a definite risk to the Chinese manufacturing industry.
Finding a solution may be difficult. While America’s manufacturing industry dropped off naturally along with a corresponding boom in technology, research, and R&D, China’s manufacturing industry may not be as easily replaced, as the economic sectors needed to replace it are still developing.
And the mobile phone industry is but one signal of the broader trend that is Chinese manufacturing moving abroad. Electronics makers like Samsung, Toshiba, Panasonic, and Sony, are all considering cutting investments in Chinese manufacturing, setting their sights on countries like India. Even domestic manufacturers are moving more of their operations abroad in a bid to become more globally relevant and competitive.