The shift of international business away from an increasingly authoritarian and economically troubled China is continuing with Apple announcing it would move more iPhone manufacturing to India over the next few years.
The latest iPhone model will be manufactured in a Foxconn facility near Chennai for sale in the Indian market, TechCrunch reports. Apple had previously only assembled older models in India.
What is now only a measure to assemble for the Indian market is set to expand, however:
Analysts estimate that Apple will turn India into a global iPhone manufacturing hub by 2025 as it slowly cuts its reliance on China, where it has been producing the vast majority of its devices for over a decade. In a report earlier this month, JP Morgan analysts said Apple will move 5% of global iPhone 14 production to India by late 2022 and expand its manufacturing capacity in the country to produce 25% of all iPhones by 2025.
Walmart is also looking to increase the presence of Indian companies on its online marketplace in the U.S. and Canada, according to Mint, an Indian financial publication. Walmart hopes to have $10 billion per year in exports from India by 2027.
This comes as China and India are becoming increasingly adversarial in their diplomatic relationships. China recently blocked a U.S.-led effort at the U.N. to add Pakistani terrorist Sajid Mir to a global terror list. It is the third time China has blocked an effort to add Mir to the list. Mir planned the 2008 Mumbai attacks that claimed the lives of 166 victims. China’s move prompted the editorial board of the Economic Times, one of India’s top English-language newspapers, to call China a “protector of global terrorism,” and external-affairs minister S Jaishankar suggested in a speech at the U.N. General Assembly that China was “defending proclaimed terrorists.”
This came as Asian leaders met in Uzbekistan for a Shanghai Cooperation Organization summit. China and India are both SCO members, and Xi Jinping and Narendra Modi were both in attendance, but they had no one-on-one meetings. It was only the most recent evidence of the split between China and India, argues Shi Jiangtao in the South China Morning Post. He traces the frosty relations to the border skirmishes in the Himalayas in 2020 that resulted in a few dozen deaths. Xi and Modi have not spoken since then, and he writes that at the summit, “There was no eye contact, smiles or handshake between the neighbouring countries’ leaders.”
Gautam Adani, the Indian billionaire who is the richest man in Asia, also made headlines saying that China will be increasingly isolated in the near future:
Speaking at a conference in Singapore on Tuesday, Adani said “increasing nationalism, supply chain risk mitigation, and technology restrictions,” as well as resistance to Beijing’s huge Belt and Road initiative, would impact China’s global role.
Asia’s richest man said that “housing and credit risks” in the world’s second largest economy were also “drawing comparisons with what happened to the Japanese economy during the ‘lost decade’ of the 1990s.”
Adani is close with the governing party in India, so his comments are especially interesting from a diplomatic point of view. For more on the troubles of the Belt and Road Initiative, see my post from yesterday about Lingling Wei’s article in the Wall Street Journal.
More businesses are realizing that China is not a trustworthy partner, and they are increasingly looking to India as a promising alternative. New Delhi seems to be encouraging the trend, and the Indian economy is projected to do quite well in the foreseeable future, especially relative to the rest of the developing world. To all who are concerned about China’s malign presence on the world stage, this is good news.