Home / Global / India’s “overtaking” of China is accelerating

India’s “overtaking” of China is accelerating

It is already happening. Large multinational companies are moving production from China to India. The latest to announce it was Apple, which plans to produce more than 50 million iPhones annually for the next two or three years — a quarter of total production — in India, according to The Wall Street Journal. Apple intends to add “tens of millions” more terminals every year with the “Made in India” seal. In addition, an attempt will be made to manufacture low-end iPhones in India that will be sold in 2025, a production step known as “new product introduction”, which until now was only done in China.

In November, Taiwanese technology company Foxconn, known as an assembler of Apple products, also announced an additional investment of nearly 50 billion Taiwan dollars ($1,589 million) in India.

In April, Foxconn is scheduled to begin the first phase of a factory under construction in Karnataka state, where 20 million cellphones are expected to be made a year, primarily iPhones, according to the WSJ.

The Indian government announced in October that Indian conglomerate Tata Group will also manufacture iPhones in the country, targeting domestic and global markets.

This move responds to Apple’s strategy to diversify its activity and not depend so much on China, until now the largest supplier of the American brand.

Political tensions between Washington and Beijing have also clouded commercial tensions. Proof is President Jinping’s ban on government officials using iPhones in their offices last September.

India has always maintained an equilibrium distance between Russia and the US, but it cannot even see China. The West has an important opportunity to stop the Moscow-Beijing axis by strengthening its ties with the subcontinent. With the melting of the Arctic looming, which would give Russia a colossal advantage in global trade, India has a more predictable legal system than China’s, has 1.412 million inhabitants, a population similar to China’s, and will become the most populous country in the world Soon next year according to the UN. In fact, by the middle of this century, India’s population will be 1,688 million, 300 million more than China’s.

India has achieved growth close to 9% of its GDP in the past two decades, which has seen the country aspire to overtake Japan as the third-largest global economy by the year 2031, according to Bank of America. The rapid growth of the middle class, which will reach 1 billion by 2034, makes it necessary to create between 10 and 12 million jobs each year for the coming decades.

The meteoric start will translate into a headache to balance the ledger. For starters, how to maintain a life expectancy that will go from 60 years in 2014 to 80 years in 2034. The goal of growing at 8%-9% per year is the key for per capita income to rise above 1,500 euros per year. to 7,000 euros, which would secure the lives of 1,250 million Indians. To do this, India needs to increase the weight of its manufacturing from 12% of GDP in 2014 to 25% in 2034, according to consultancy Pwc.

The consequence is that India needs the West more and vice versa.

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