Apple is shifting most of its production of iPhones headed to the US from China to India. [Photo Credit: BBC News]
Just as India showed flickers of progress toward its long-held dream of becoming the world’s factory, Washington and Beijing announced a trade “reset” that could derail Delhi’s ambitions to replace China as the global manufacturing hub.
Last week, Trump’s tariffs on China dropped overnight – from 145% to 30%, vs 27% for India – as the two sides thrashed out an agreement in Switzerland.
As a result, there’s a chance manufacturing investment that was moving from China to India could either “stall” or “head back”, feels Ajay Srivastava of the Delhi-based think tank, Global Trade Research Institute (GTRI).
The change in sentiment stands in sharp relief to the exuberance in Delhi last month when Apple indicated that it was shifting most of its production of iPhones headed to the US from China to India.
The change in sentiment stands in sharp relief to the exuberance in Delhi last month when Apple indicated that it was shifting most of its production of iPhones headed to the US from China to India.
That may well still happen, even though US President Donald Trump revealed that he had told Apple CEO Tim Cook not to build in India because it was “one of the highest tariff nations in the world”.
There were early signs that Indian exporters were already stepping in to fill the gap left by Chinese producers. New export orders surged to a 14-year high, according to a recent survey of Indian manufacturers.
Nomura, a Japanese broking house, also pointed to growing “anecdotal evidence” of India emerging as a winner from “trade diversion and supply-chain shift in low and mid-tech manufacturing” particularly in sectors like electronics, textiles and toys.
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