It’s difficult to miss the scope of what’s being constructed when you drive through Sriperumbudur, a dusty industrial town in Tamil Nadu about forty kilometers outside Chennai. With worker dorms still under construction in early 2024, cranes moving against the flat southern sky, and the entire operation humming with a quiet urgency, Foxconn’s iPhone assembly complex stretches across the landscape like a small city. An increasing amount of the most well-known consumer product in the world is now produced here. Additionally, many Indians believe that something long promised is finally coming to pass.
Apple is the main attraction, but it’s not by itself. The Pixel 8 from Google is produced in India. The Galaxy S24 from Samsung is as well. Elon Musk has been talking about building an electric car plant. After years of stagnating around $300 billion, the nation’s merchandise exports surpassed $400 billion.
| Category | Details |
|---|---|
| India’s economy ranking | Asia’s third-largest economy; forecast to overtake Japan and Germany to become the world’s third-largest (S&P Global, Morgan Stanley) rising |
| GDP growth projection | ~6.3% average annual nominal GDP growth through 2030; GDP expected to more than double by 2031 (Morgan Stanley) |
| iPhone production in India | 12–14% of iPhones worldwide currently made in India; up to 25% expected by end of 2024 (JP Morgan) expanding |
| Major brands manufacturing in India | Apple (iPhone 14, 15), Google (Pixel 8), Samsung (Galaxy S24); Elon Musk exploring EV factory |
| Key manufacturing states | Tamil Nadu, Telangana, Karnataka (Sriperumbudur, Narsapura); National Capital Region in the north |
| Government incentive scheme | Production-Linked Incentives (PLI) — financial subsidies for companies establishing manufacturing in India |
| Merchandise exports milestone | Crossed $400 billion — up from ~$300 billion where they stagnated for nearly a decade growth |
| Key structural challenges | Higher wages than China, bureaucratic complexity, infrastructure gaps, limited SME support, outside major Asia-Pacific trade pacts obstacles |
| “China Plus One” strategy | Global firms diversifying away from sole China dependence — India, Vietnam, and Mexico primary beneficiaries |
| Official reference | BBC: Can India replace China as the world’s factory? (bbc.co.uk) |
The government now talks about manufacturing aspirations with a confidence that would have seemed premature even five years ago because Prime Minister Modi’s production-linked incentives scheme has dangled subsidies in front of multinationals willing to shift capacity, and enough of them have accepted the offer. Industrialist Anand Mahindra wrote on X about proudly informing a Verizon store employee that his iPhone 15 was manufactured in India. The pride in that statement was sincere, and it conveyed something true about the nation’s perception of its current state.
The worldwide reasoning behind this is simple and, for once, beneficial to India. Businesses have been observing the effects of concentrating too much manufacturing in one location for years. Apple’s most important assembly plant was severely disrupted by China’s zero-COVID lockdowns, costing the company an estimated six billion dollars in lost holiday revenue.
If anything, trade tensions between Beijing and Washington have gotten worse. As a result, there has been a broad corporate shift toward what supply chain executives refer to as the “China plus one” strategy: start creating redundancy instead of concentrating all of your production in one nation. The main recipients are Mexico, Vietnam, and India. India has received the most attention due to its size, English-speaking labor force, and government that provides incentives rather than barriers.
According to JP Morgan analysts, Indian factories may produce 25% of all iPhones by 2025. That is a startling figure, not because it would indicate that China had been supplanted by India, but rather because it would indicate that a single product line had changed enough to be significant on a large scale. When announcing a 500 million euro investment in Indian warehousing capacity, Oscar De Bok, CEO of DHL’s supply chain division, put it bluntly: businesses want two or three options for sourcing and are no longer willing to wait for policy changes in Beijing.
However, this is where the narrative becomes more nuanced and the discrepancy between ambition and reality becomes apparent. India’s wages are not as low as the narrative sometimes suggests; when productivity is taken into account, some estimates place them at almost three times China’s. India hasn’t had enough time to match the integrated density of China’s manufacturing ecosystem, which has been developed over forty years.
It took China a generation to develop the supplier networks, component clusters, and engineering talent concentrated in areas like Shenzhen, and India is expected to do it in a fraction of the time. The much-publicized Vedanta-Foxconn semiconductor plant has encountered difficulties and delays, serving as a reminder that high-profile investments don’t always translate into operational factories.
Another structural issue that receives insufficient attention is India’s conspicuous absence from the two trade frameworks that encompass the vast majority of Asian trade: the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Trans-Pacific Partnership.
When compared to Vietnam and Thailand, which both score significantly higher than India on the World Bank’s ease of doing business metrics, that is a significant competitive disadvantage. The construction of integrated manufacturing infrastructure is the focus of Vietnam’s 2030 master plan. To put it kindly, India is still developing its infrastructure.
Modi’s incentive program has mainly ignored small and medium-sized businesses, which employ the great majority of India’s workforce. Outside of textiles and clothing, the PLI program does not cover the labor-intensive industries that would enable India to truly absorb the millions of workers who enter its labor market each year, according to Mihir Sharma of the Observer Research Foundation. Every year, twelve million new workers enter the Indian labor force. Even though the number of factory jobs being created at the moment is impressive, it is far less than that.
It’s still unclear if this turning point will lead to something revolutionary or if it will become a more constrained success story, with a few flagship industries succeeding while the larger ecosystem falls behind. People who have been observing India closely for years often say that the nation never misses an opportunity. The infrastructure has improved.
The political will is now more concentrated than it was. In Tamil Nadu, Apple truly exists, produces genuinely good products, and employs genuinely many people. The next ten years, not this one, will determine whether that marks the start of an industrial revolution or continues to be a string of remarkable but isolated victories.
