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India Today
11-08-2025
- Business
- India Today
Why 'Make in India' still depends so much on 'Made in China'
Every time India feels the heat from outside, whether it's Donald Trump's tariffs, a tense standoff at the border with China, or a festive-season push to shop locally, the 'Make in India' slogan roars back into headlines like a rallying like our economic version of calling the team into a huddle before the next big play. But more than a decade after its grand launch, a question still lingers: is this game plan really scoring for India, or just helping 'Made in China' slip in through the side door?advertisementWhen Prime Minister Narendra Modi launched the 'Make in India' programme in 2014, it was meant to transform India into a global manufacturing hub, create millions of jobs, and reduce dependence on imports, especially from China. The target was to raise manufacturing's share in GDP from around 15% to 25% by 2025. More than a decade later, a report from Hinrich Foundation suggests the reality is far more India has made progress in assembling products such as smartphones, solar modules, and certain defence equipment, it remains heavily reliant on Chinese components, raw materials, and technology. The dependence has shifted from finished goods to upstream goods, keeping China firmly embedded in India's supply TRADE DEFICIT WITH CHINAGovernment trade data highlights the scale of the challenge. In the 2024/25 fiscal year, India's trade deficit with China hit a record $99.2 billion, up sharply from $85.08 billion in 2023/24, $83.2 billion in 2022/23, and $73.31 billion in 2021/ from China surged 25% year-on-year in March 2025 alone, reaching $9.7 billion for the month. Electronics, electric batteries, and solar cells drove much of this increase. Over the full year, imports from China climbed to $113.5 exports to China have gone the other way. In March 2025, they fell 14.5% year-on-year to $1.5 billion. Over the 12-month period, exports totalled just $14.3 result: China ended the fiscal year as India's second-largest trading partner after the US, with two-way trade worth $127.7 billion, but heavily skewed in Beijing's TARGETS VS REALITYThe Production Linked Incentive (PLI) scheme, launched in 2020 with Rs 1.9 trillion in incentives for 14 sectors, was designed to build domestic manufacturing have been gains in electronics exports, semiconductor projects, and solar module production. Tariffs plus domestic incentives have reduced the share of Chinese solar imports from over 90% to 56% for cells and 66% for manufacturing's share of GDP is now below 14%, lower than when 'Make in India' began. Many sectors, including speciality steel, textiles, auto parts, and batteries, have fallen short of targets. India still imports over 70% of the active pharmaceutical ingredients (APIs) used in its generic drug industry from China, despite targeted PLI of India's headline 'success stories' remain dependent on Chinese inputs. About 70% of components for drones are sourced from China as per the report. In smartphones, 99% of devices sold in India are assembled locally, but local value addition is low, 6–8% for iPhones and 25–30% for some Samsung manufacturing advantage lies in its complete industrial ecosystem. Over decades, it has built tightly linked supply chains between factories, research institutions, and skilled by contrast, has developed strong capabilities in software and services but not in large-scale manufacturing, forcing companies to import expertise and components from Chinese SECURITY, AND ECONOMICS COLLIDINGBorder tensions in 2017 and 2020 led to bans on Chinese apps, tighter investment rules, and limits on visas for Chinese nationals. While these measures were aimed at national security, they also made it harder for Indian manufacturers to secure critical components and partnerships, slowing localisation these frictions, bilateral trade has continued to grow, with imports from China increasingly dominated by upstream goods such as display modules, printed circuit boards, and battery 2025, the government appears to be softening its stance. Indian manufacturers including Dixon Technologies, Zetwerk, and Micromax are exploring joint ventures with Chinese companies for parts and sub-assemblies. Dixon has already partnered with China's HKC to make semiconductor display modules in senior officials, including the Chief Economic Advisor, have argued that deeper integration with Chinese supply chains could help build India's manufacturing strength. Others, like Commerce Minister Piyush Goyal, remain opposed, warning that such dependency could undermine strategic R&D AND SKILLS GAPThe Hinrich Foundation report points to chronic underinvestment in research and development. Large Indian conglomerates spend far less on R&D than global peers, leading to fewer patents and slower technology adoption. In critical areas like EV batteries, semiconductors, and robotics, India is far behind China, which holds key patents and dominates global supply startups have also been criticised for focusing on consumer-facing apps instead of advanced technologies. Startup founders say complex regulations, slow approvals, and inconsistent policy support often push them to relocate report warns that India risks becoming 'multi-dependent' on China for upstream goods, on the US for advanced technology, and on Russia for energy and defence supplies. While increased Chinese investment could create jobs and boost manufacturing capacity, it must be carefully managed to avoid deepening strategic vulnerabilities.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- EndsTune InMust Watch
Mint
09-08-2025
- Business
- Mint
Why poor nations got hit with higher tariffs than rich ones
President Trump's tariffs barrage has landed the heaviest blow on the very nations that global trade was supposed to help: poor countries. For decades, the U.S. and other rich countries have granted special trading privileges to many poor countries, cutting tariffs and boosting market access to lend emerging countries a helping hand. That hasn't been Trump's approach. While his administration placed tariffs of 10% to 15% on imports from many of the world's wealthiest countries, such as South Korea, Japan and European Union member states, it slapped goods from developing countries such as Vietnam, Bangladesh, South Africa and Iraq with duties of 20% or higher. Two of Asia's poorest countries, Myanmar and Laos, were hit with tariffs of 40%, a potential death knell for their U.S. exports, which include goods such as furniture and garments. On Wednesday, Trump said he would raise tariffs on India to 50%, as Washington and New Delhi scuffled over India's continued imports of Russian oil. In a new era of gloves-off trade negotiations, these poorer countries had the least leverage with a country the size of the U.S. Low wages have turned some of them, such as Bangladesh and Vietnam, into manufacturing powers, but their citizens can't afford expensive American products, meaning they often run the sort of large trade surpluses with the U.S. that have drawn Trump's ire. Moreover, the president has demanded that trading partners invest in the U.S., but few developing countries have the financial firepower to match the hundreds of billions of dollars that Japan, South Korea and the EU have pledged to sink into the American economy. Some countries that carry geopolitical or economic weight with the U.S. were spared the worst of the tariffs. The U.S. didn't levy tariffs higher than the baseline 10% on Saudi Arabia, Qatar or the United Arab Emirates—oil and gas producers whose leaders are close to Trump. 'It's left developing countries with very high tariffs," said Deborah Elms, head of trade policy at the Hinrich Foundation, an Asia-based think tank. 'It's a significant change especially for treatment of least developed countries." Until 2020, many poor countries, such as Cambodia and Bangladesh, benefited from a special arrangement known as the Generalized System of Preferences that eliminated trade duties on products from more than 100 of the world's poorest countries and territories. The arrangement hasn't been renewed. Now poor countries' access to the U.S. has diminished further. Take Cambodia. The small country, a large garment exporter to the U.S., was hit with 19% tariffs, causing widespread worry in the country's clothing industry. 'We are a poor country. Our purchasing power is not the same as a rich country," said Sun Chanthol, Cambodia's deputy prime minister who led the tariff talks with the U.S., in an interview. Cambodia has slashed its own tariffs on U.S. imports to zero. Its national airline has promised to buy 10 planes from Boeing, with an option to buy 10 more—a modest proposition compared with financial pledges of rich countries such as Japan, which agreed to buy 100 jets from the U.S. aerospace company. Although the 19% tariff Cambodia ended up with was slightly better than that of some other developing countries, the government had been pushing for a lower rate. 'I was hoping to at least get 15% like Korea or Japan," Sun Chanthol said. Now, companies are worried about the fallout of higher tariffs on their exports to a market as crucial as the U.S. Bernhard Wewengkang, an executive at PT Great Giant Pineapple, one of the world's largest canned pineapple exporters, based on the island of Sumatra in Indonesia, expects demand will soften in the U.S., the company's largest market, given the 19% tariff on Indonesian exports to the American market. He is hoping to offload more canned pineapple into other markets—but so is everybody else in the industry. Great Giant Pineapple's margins are too small to lower its prices, meaning U.S. importers will face higher costs that they may pass along by raising prices for shoppers. Wewengkang worries that will hit canned pineapple sales and hurt the company's revenue. 'It's a lot," he said of the tariffs. Economists and trade officials are often left scratching their heads about why certain countries have dodged the bullet while others get slammed. Algeria and Libya face tariffs of 30% on their exports to the U.S., while Iraq's goods will be charged a duty of 35%. Among the highest tariffs was the 41% levy placed on goods from Syria. Having lived under punishing sanctions for years, the country exports very little to the U.S. Its tariff rate is higher even than the 39% tariff on Switzerland, one of the rare rich countries to get hit hard. In some cases, such as with Vietnam, developing countries have come under scrutiny from the White House because of their close trade and diplomatic ties with China. Other times Trump has expressed anger about their domestic politics. Trump placed 50% tariffs on certain Brazilian products, such as coffee. In justifying the levies, he cited legal action against former right-wing President Jair Bolsonaro and against U.S. tech firms. Last week, the White House confirmed that South Africa would be hit with 30% tariffs, despite monthslong efforts by South African officials to reduce them. In May, South African President Cyril Ramaphosa met with Trump at the White House to try to salvage a deteriorating relationship with the U.S. over issues ranging from race relations to Israel and trade. But the Oval Office visit devolved into a tense exchange over perceived threats to white farmers in South Africa. South Africa's exports are mostly platinum and cars. But senior South African officials say many exports—particularly the country's citrus fruit—don't pose a threat to American producers because they are counterseasonal, meaning they fill gaps in the U.S. market rather than replacing domestic products. Hundreds of thousands of cartons of citrus have already been packed and are awaiting shipment to the U.S. in the coming weeks, the Citrus Growers' Association of Southern Africa said in a statement. 'The implementation of a 30% tariff…will mean most of this fruit will be left unsold," it said. Write to Jon Emont at and Alexandra Wexler at
Irish Independent
01-08-2025
- Business
- Irish Independent
Global markets tumble as Trump's tariff reality starts to bite
Japan and the European Union have locked in tariffs at 15pc but many economies have been hit with even higher trade barriers – including Canada (35pc) and India (25pc). The average levy on imports to the world's largest economy is now coming in at 15pc, the steepest since the 1930s. "It's a very high tariff wall," said Deborah Elms, head of trade policy of the Hinrich Foundation. "The cost is going to be significantly higher for American companies and American consumers who will respond surely by buying less," she said. Meanwhile, exporters outside the US are set to see demand fall. "For the rest of the world, this is a serious demand shock," Raghuram Rajan, former India central bank governor and chief economist of the International Monetary Fund, who is now a professor at the University of Chicago Booth School of Business, told Bloomberg TV. On Friday, Asian shares fell 0.7pc, Europe's Stoxx 600 benchmark fell more than 2pc and is on track for its biggest weekly drop since Trump announced his first major wave of tariffs on 'Liberation Day' back in April. In Dublin, the Iseq was down more than 3pc by Friday afternoon. AIB (-5.11pc) and Bank of Ireland (-3.69pc) were among the biggest decliners despite announcing profits this week. Both are seen as barometers of the wider Irish economy. In the US weaker than expected jobs number further darkened investor sentiment. It prompted money market traders to add bets for a rate cut from the Fed at its September meeting. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5pc, bringing the total loss this week to roughly 2.7pc. Japan's Nikkei closed 0.7pc lower. The US dollar, which had been on a strengthening streak earlier in the week reversed course after the bad jobs data. The dollar index, which measures the currency against six others, was last down 1pc on the day.
Bloomberg
01-08-2025
- Business
- Bloomberg
Trash Haulers to Carmakers Are Feeling the Pain of Trump's Tariffs
To get Industrial Strength delivered directly to your inbox, sign up here. The biggest reset of international trading relationships in a century is starting to hurt — particularly in the manufacturing industry that President Donald Trump's sweeping tariff policy is meant to help. For those countries who haven't yet brokered agreements on tariff rates with the White House — including Canada, Taiwan and Switzerland — the clock ran out on Friday for a temporary reprieve from higher levies. The deals that have been reached include tariffs that range from 15% to 20% — lower than what Trump had threatened but enough to boost the average tax on goods imported to the US to more than six times what it was in the year before he took office, according to Bloomberg Economics. Such a significant across-the-board increase is pinching profit margins and wreaking havoc on supply chains. Moreover, the trade deals that have been announced are merely bare bones frameworks, with certain important terms still under negotiation and partners offering varying descriptions about what exactly was agreed upon. Deborah Elms, the head of trade policy at the Hinrich Foundation, has aptly dubbed them ' napkin deals ' — as in the kind of thing one might jot down on a cocktail napkin and about as durable under scrutiny.
Bloomberg
30-07-2025
- Business
- Bloomberg
Trade Leaders on Tariff's ESG Impact
Deborah Elms, Head, Trade Policy, Hinrich Foundation and Mary Ng, Former Minister, International Trade, Canada discuss how the unfolding trade war impacts ESG policy in Asean and beyond with Bloomberg's Bill Faries at the 2025 Bloomberg Sustainable Business Summit in Singapore. (Source: Bloomberg)
