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If you purchased an iPhone 11 recently, chances are that you have in your hands a smartphone assembled in India. After over a year of speculation on whether or not Apple will assemble its top-of-the-line product from a factory in India, news emerged last week that the iPhone 11 has indeed been “Made in India” at its contract manufacturer Foxconn’s plant near Chennai. This is good news that the Narendra Modi government can well claim as a success. But it’s important to understand why it is good news and what kind of a success it is, to ensure that new government policies do not undermine this achievement.

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A vote on India’s ability

First, why is it good news? Although other smartphone manufacturers have been assembling advanced models in the country over the past couple of years, Apple’s move is a vote of confidence that India is ready and competitive for high-end electronics manufacturing. If things go well — and the government has an important role to play in this — Apple’s main manufacturing partners could expand their presence in India, employing tens of thousands of people, and growing the ecosystem that can support millions of livelihoods. That in turn can raise not only productivity, but also offer much higher quality workplaces and living conditions for India’s factory workers. As the world’s manufacturing companies look for alternatives to their high-risk China-dependent supply chains, Apple’s decision to assemble the iPhone 11 locally makes India’s candidature a lot more credible.

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India breaks the triangle of dependency

So why is it a success? Because India has finally broken what has been called a “triangle of dependency” formed by Apple, Foxconn and China. As The Wall Street Journal reported earlier this year, “Apple grew to depend on Foxconn to make devices and Chinese consumers to buy them. Foxconn built its business by leaning on China’s vast workforce and control over land to construct factories. And China became beholden to Foxconn as the nation’s largest private-sector employer and Apple as a trainer of new technology suppliers.” This led to a sort of equilibrium that Apple was reluctant to disturb — few other countries could offer hundreds of thousands of skilled workers that are employed at a single Foxconn campus, and moving production out of China risked incurring Beijing’s wrath.

Things would have continued in this manner had the Donald Trump administration not imposed tariffs on imports from China, setting off a trade war in 2018. Then came the Covid-19 pandemic that not only caused production disruptions due to lockdowns in China, but jolted the world’s manufacturers into realising their China-addiction. Some of them could move production to other East Asian countries like Vietnam or locations like Mexico that are closer to their main markets. But by far, the only country that can offer a scale comparable to China’s is India — but India, as we know, has long had problems of its own making in attracting big factories.

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