China is 145%, India 90 days: clock ticking at the success or failure moment of PM Modi
Indian business leaders and government officials see more than just a slap on their wrist. They saw an opening. China is India’s largest economic rival and has been hit harder. The same is true in Vietnam. India’s outlook appears even more obvious when Trump doubled and raised tariffs on Chinese goods to 145%.
“This is an important opportunity for India’s trade and industry,” said Praveen Khandelwal, a member of the parliament of Bharatiya Janata party. The New York Times. Khandelwal is also an important voice in India’s business hall.
For years, India has tried to become a manufacturing alternative to China. Modi’s “Made in India” campaign in 2014 promises to transform the country into the ground of factories around the world. But despite the grand slogan sounds, the supply chain in India tells a more chaotic story.
Foxconn, iPhone and Made-India Dreams
There are some victories. Foxconn, a Taiwanese supplier of Apple, has begun making iPhones in Tamil Nadu, gradually shifting some of its China-based businesses to India. According to one person involved in Apple’s supply chain, India’s production could soon account for 30% of global iPhones, a significant increase that approached zero a few years ago.
That’s not all. Electronic transport at major airports in Tamil Nadu doubled to more than 2,000 tons per month in the weeks after Trump announced the 27% tariff. Apple and others have obviously started hedging their bets. But with the success of the title, the truth is clearer. Despite decades of industrial policy and more than $26 billion in government incentives, India’s manufacturing sector has now accounted for a wider economy than the broader economy – down 15% from 15% a decade ago, but accounting for less than 13% of GDP. By comparison, manufacturing accounts for about 25% of GDP in many East Asian economies.
India initially promised 100 million new manufacturing jobs by 2022. Now, this goal seems out of reach.
Interior of factory in India: bright lights, imported parts
Haryana’s RAI Industrial Estate is just an hour’s drive from New Delhi and tells a compelling story. In 2019, Vikram Bathla founded battery maker Lokraft. His 300 workers, mainly immigrants from poorer Indian states, carefully assembled lithium-ion batteries under bright fluorescent lights.
But look closely: the battery is marked as “Made in Inner Mongolia”. Larger welding machine? Chinese. Supply chain? Still a foreigner.
“We can buy equipment, we can do that,” Batra told The New York Times. “What we don’t have is skilled workers using it.”
Batra said he is still struggling to catch up with his 15-year striker for five years.
On the road, auto-made car seat covers face similar restrictions. The company imports robotic cutting machines from Germany and Italy and relies on imported synthetic fibers.
result? “Made in India” usually refers to parts assembled in India, including elsewhere.
Stubborn obstacles: land, lawyers and cycles in the traditional Chinese tape festival
India’s manufacturing difficulties go beyond technology and training.
Anil Bhardwaj, head of the Manufacturing Trade Organization, pointed out the deep-rooted problems: high land costs, lack of professional engineers, unreliable bank financing and government flip-flops, these triggers can bring uncertainty to investors.
But Bhardwaj also highlights a more unusual bottleneck: the court system. “That’s why people are really afraid of big companies in India,” he said.
With more than 50 million cases heard, India’s judiciary has made small businesses vulnerable. Challenging a strong company or its political allies can be ruined. So many small companies deliberately avoid expansion and are wary of being dragged into the legal hell.
Bhardwaj admits that the progress is real. Now, electricity is higher than it was a decade ago. Modi’s digital reforms have eased some business procedures. But fundamentals are still fragile.
Even if it is more closely aligned with the United States, India is still closely integrated into China’s supply chain. About 40% of Vietnam’s imports come from China, a reflection of India’s dependence on Chinese electronics and machinery.
Now, New Delhi is seeing a new opening: As Washington imposes more than 120% tariffs from low-value goods from China since May, it has entered the gap left by Chinese e-commerce exporters.
A report by Delhi think tank GTRI says it is a “huge opportunity” for Indian small businesses, handicraft exporters and fashion sellers –if The government can reduce the traditional Chinese tape festival.
American Gambling: Can India replace China?
As tensions between Washington and Beijing escalate, some U.S. policymakers see India as a strategic swing partner of the new anti-China coalition. According to Bloomberg, Trump’s Treasury Secretary Scott Bessent proposed a “big pack” plan to establish economic alliances with India, Japan, Vietnam and South Korea to isolate China.
“They are good military allies, not perfect economic allies. At the end of the day, we may be able to reach an agreement with them,” Bessent said.
India is neatly in line with this vision. It has a huge market, a franchise with China and aspires to be regarded as a global leader. Its decision to shut down Chinese tech companies like Byd while welcoming American giants like Tesla, marking a deliberate hub.
Trump’s 90-day tariff probation on countries like India is part of the script. The idea: Rewards match U.S. trade goals, preventing China from transshipping and buying U.S. goods. In return, they avoid punishing our tariffs.
But is New Delhi really ready?
Boeing, Beijing and rebound
The deeper impact of Trump’s trade war is felt elsewhere. In response to retaliatory moves, Beijing instructed Chinese airlines to stop new orders from Boeing, the largest aircraft supplier. The move shocked observers, especially as China expects to purchase nearly 9,000 Boeing jets over the next two decades. By comparison, India is expected to order only 2,400 times.
The message from China is clear: Even in aviation, it is willing to bear the pain of its domestic manufacturer Comac. Meanwhile, American critics say Trump’s chaotic tariff regime – some departments carvings while others suddenly reverse – nepotism.
A meme shared widely on Chinese social media shows that Trump announced “I hold the cards” and Xi Jinping replied: “These cards are made in China.”
Red lines and red faces
Back in the United States, liberal commentators are openly questioning whether Trump is surpassing Beijing or simply launching it.
“What if you start a trade war with China and lose?” asked Ezra Klein, a freestyle podcast. “What if… you make China look stronger, more reliable, and more strategic in the eyes of all other countries?”
Trump’s obvious hesitation – first keeping the drug’s tariffs and then hinting that he might restore their taxes – even frustrated his base. His move to exempt automakers from certain tariffs has led to allegations of insider trading. The US toy industry, which costs $42 billion, is very dependent on China and is difficult to lobby for exemptions.
As Trump himself said, “I won’t change my mind. I’m just a very flexible person.”
This moment is here. But can India catch it?
The moment in India seems to have arrived. Trump’s punishment on China has reorganized global supply chains. Western companies are seeking diversity. Diplomacy, New Delhi is being recruited. Strategically, this is crucial.
But the question remains: Can India deliver?
Its huge potential is undeniable. But the same obstacles – lack of skilled workers, fragile infrastructure, legal issues and policy unpredictability – are still vaguely visible.
If India wants to be the world’s factory, it will need more than just favorable tariffs and bold headlines. It requires the restoration of the factory floor. and fast.
(Input with NYT)
