India Making Inroads into Export Market Dominated by China

India is gradually eroding China's dominance in electronics exports in key markets as manufacturers diversify supply chains away from China to other parts of Asia, a recent study reveals. The impact is most notable in the UK & US, where geopolitical tensions with China have escalated in recent years. According to London-based Fathom Financial Consulting, India's electronics exports to the US as a ratio of China's have increased to nearly 7.65% in November last year from around 2.51% in November 2021. In the UK, this share rose to about 10% from 4.79%.

Further, to attract electronics manufacturers, India's government is offering significant incentives such as tax cuts, rebates, easier land acquisition, and capital support. The goal is to expand domestic manufacturing, boost exports, and help businesses achieve global scale through partnerships. India is home to 三星电子 largest mobile phone factory, and Apple Inc. manufactures at least 7% of its iPhones in India through contract manufacturers Foxconn Technology Group and 和联 .

The increase in electronic exports is likely due to Foxconn's growing investment in India, states Andrew Harris, an economist at Fathom Financial Consulting. However, India's progress in gaining market share has been more limited in Europe and Japan, indicating a move toward dual supply chains (China plus one) rather than a complete shift away from China-based production, at least for now. Notably, the report shows that India's electronics exports as a ratio to China's were 3.38% in Germany and 3.52% worldwide.

Moreover, Indian companies have been highlighting their role in multinational companies' 'China plus one' strategy, where manufacturers establish backup capacity in other countries. Furthermore, India's increasing market share is a boost for the country's government, promoting the 'Make in India' initiative as a way to create jobs, expand exports, and make the economy more self-reliant by reducing the need for imports.