Multinationals wanting to reduce their geopolitical vulnerability are on the hunt for the “plus one” in a “China plus one” production strategy — or increasingly, as tensions rise between Washington and Beijing, a “China plus one, minus China”.
India, especially given last year’s big expansion in high-end Apple iPhone production, is an obvious contender. It’s low-cost, English-speaking and has a substantial domestic market. Prime Minister Narendra Modi presents himself as an enthusiastic globaliser, and has signed or is negotiating bilateral trade deals with the UAE, Australia, the UK and the EU. His “Make in India” strategy, launched in 2014, aims to replicate the success of multiple east Asian countries creating globally competitive manufacturing and lifting millions out of poverty.
The reality is less impressive. India has already had a decade of opportunity to scoop up the industrial production leaving China. It has performed poorly, and its trade and investment policy is regressing towards unhelpful Indian traditions of protectionism and import substitution.