India’s Manufacturing Push: Lessons from China’s Industrial Strategy

Apple’s challenges in India, marked by Foxconn recalling engineers, highlight hurdles in India's manufacturing growth under the ‘Make in India’ initiative. Launched in 2014, it aims to boost industrial output and reduce imports. Comparisons with China’s ‘Made in China 2025’ reveal lessons for India, as China leads in green tech, AI, and high-speed rail but faces criticism for protectionism. While India excels in services, it must address supply chain gaps and innovate to rival China’s manufacturing dominance and attract global players.

Apple Inc.’s recent challenges in India, highlighted by Foxconn Technology Group’s decision to recall hundreds of Chinese engineers and technicians from its Indian iPhone factories, have cast a spotlight on the country’s ambitions to transform into a global manufacturing hub. While Apple has steadily increased its production efforts in India—currently accounting for 15% of all iPhones globally and aiming to reach 25% in the coming years—this development underscores the hurdles in realizing India’s manufacturing dreams under the ‘Make in India’ initiative.

The Vision Behind ‘Make in India’

Launched in 2014, the ‘Make in India’ campaign is a flagship initiative aimed at turning India into a hub for manufacturing, design, and innovation. The program has been a cornerstone of the government’s efforts to boost industrial growth and reduce reliance on imports. Apple’s growing assembly operations in India are often touted as a success story of this initiative.

However, parallels are frequently drawn between India’s manufacturing push and China’s ambitious industrial policy—‘Made in China 2025.’ While the two strategies differ in execution and scope, China’s experience offers several insights for India as it seeks to strengthen its manufacturing sector.

Understanding ‘Made in China 2025’

Introduced in 2015, ‘Made in China 2025’ was a strategic blueprint to elevate China’s manufacturing capabilities to higher-value sectors. At the time, China was already known as the “world’s factory,” but this policy aimed to expand the country’s dominance into cutting-edge industries. The plan outlined 10 key focus areas, including electric vehicles, artificial intelligence, next-generation IT, aerospace, advanced materials, and green technologies.

A recent report by the World Economic Forum (WEF) emphasized the policy’s transformative impact, stating that it has evolved into a new phase characterized by AI-driven innovation, green energy adoption, and a focus on self-reliance.

Why Has China Gone Quiet About Its Strategy?

Despite its success, ‘Made in China 2025’ has become a sensitive topic in global discourse. As noted in an article by The Economist, the policy is viewed with suspicion abroad, akin to a “name that must not be spoken.” The concerns center on allegations that the initiative creates an uneven playing field by providing substantial state support to Chinese companies while imposing restrictive conditions on foreign firms operating in China.

For instance, Chinese industries benefit from easy access to loans, tax breaks, and other government incentives, enabling them to produce goods at lower costs. These products, often exported at competitive prices, have disrupted industries in importing nations, including India. Meanwhile, foreign companies looking to enter the Chinese market are frequently required to share proprietary technology and expertise, which has fueled criticism of the policy’s protectionist undertones.

Faced with backlash and the threat of sanctions from Western nations, China has downplayed public discussions about ‘Made in China 2025.’ However, the strategy’s influence on global supply chains and industrial trends remains undeniable.

Measuring the Success of ‘Made in China 2025’

China’s results under ‘Made in China 2025’ have been remarkable in several areas. According to the WEF report, the country now leads in critical green technologies, producing over 75% of the world’s lithium-ion batteries and nearly 80% of solar modules. It also dominates electric vehicle manufacturing and high-speed rail technology, showcasing its engineering prowess. Additionally, China has made significant strides in robotics, sensor technologies, and workforce upskilling.

However, not all goals have been achieved. The country has struggled to achieve self-sufficiency in semiconductor production and passenger aircraft manufacturing. Another shortfall has been its neglect of the services sector, as the policy’s intense focus on manufacturing came at the expense of fostering domestic demand and developing other parts of the economy.

Lessons for India

India’s journey toward becoming a manufacturing powerhouse is still in its early stages. Unlike China, India boasts a robust services sector but faces challenges in building integrated supply chains and scaling up industrial production. The contrasting experiences of ‘Make in India’ and ‘Made in China 2025’ highlight the importance of balancing policy objectives, fostering innovation, and investing in workforce development.

As global supply chains evolve and companies like Apple seek alternatives to China, India has a unique opportunity to position itself as a key player in high-value manufacturing. However, realizing this potential will require addressing infrastructure gaps, ensuring policy consistency, and learning from both the successes and missteps of China’s industrial strategy.

By drawing on these lessons, India can chart a path to industrial growth that not only strengthens its economy but also establishes it as a formidable player in the global manufacturing landscape.