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India comes for China’s manufacturing crown as supply chains slowly shift
- Reforms and incentives are attracting international investors looking to diversify away from China amid its intensifying rivalry with the US
- But India still has a way to go – on trade ties, education and infrastructure, among others – if it wants to catch up to its giant northern neighbour
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Warm weather’s early onset isn’t sapping the spirits of officials in Tamil Nadu this year. Instead, the mood is upbeat as one high-profile overseas investment after another has flowed into the southern Indian state over the past few months.
The state, whose capital Chennai has been dubbed the “Detroit of Southern Asia” because of its new-found status as a carmaking hub, has quickly expanded its global footprint by hosting three of iPhone-maker Apple’s top contract suppliers: Foxconn, Pegatron and Tata Group.
Shipping and logistics giant UPS also established a global technology hub in the city, beginning in August last year, while leading renewables energy firm First Solar has invested in a manufacturing facility.
Chennai is just one of many Indian industrial hotspots that have started expanding as global firms look to diversify their manufacturing base amid intensified US-China rivalry and faltering growth in the world’s second-largest economy.
Two decades ago, China and India’s economies were neck and neck, and would famously often be compared as the Dragon and Elephant at investors’ meetings, where attendees would dwell on their relative merits. Over the years, the Dragon beat the Elephant hands down to emerge as the world’s factory.
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