India’s Electronics Manufacturing Growth Still Relies on Chinese Components

The China decoupling paradox: why the world still needs its manufacturing machine

India’s expanding electronics manufacturing industry has changed what it imports from China, but it has not removed the need for Chinese components.

For hardware engineer Neeraj Arora, the shift is visible in the move from importing finished phone chargers to making more of those products in India while continuing to source parts from China.

From finished products to imported components

A decade ago, Arora imported finished phone chargers from the world’s second-largest economy.

Today, more of these products can be made in India, even as manufacturers there still rely on Chinese parts for assembly.

The change illustrates why the idea of global decoupling from China remains difficult to achieve.

Talk of decoupling has persisted for years, alongside speculation that emerging economies such as India and Vietnam could replace China as the “world’s factory”.

But Chinese parts, machinery and know-how remain deeply embedded in countries trying to build manufacturing industries of their own.

That means the expansion of manufacturing elsewhere does not necessarily translate into a clean break from Chinese supply chains.

Instead, the relationship can shift from importing complete products to importing the components and expertise needed to assemble them locally.

The ecosystem behind China’s role

Arora said China’s advantage extends across a broad industrial base rather than a single line of business.

“They don’t have a single industry; they have created an ecosystem,” said Arora.

He has travelled repeatedly to Shenzhen, Dongguan and Guangzhou, southern China’s manufacturing hubs.

Those hubs offer a wide range of competitively priced parts, including power-switching transistors and charging chips.

For countries developing their own electronics industries, that breadth keeps China central even when local production is growing.

Source: South China Morning Post