Global Economics
Phapano Phasha|Published 29 minutes ago
The United States has historically played a pivotal and transformative role in the ascendance of numerous advanced economies. This influence often manifests through direct assistance, strategic policies, market access, and investment incentives.
Following the conclusion of World War II, the Marshall Plan injected billions into the reconstruction of war-torn Western Europe.
This initiative facilitated economic integration among nations previously in conflict, culminating in the establishment of institutions like the European Union, complete with shared frameworks such as the Euro and the Schengen visa area.
In Asia, the US occupation and subsequent reconstruction efforts helmed by General Douglas MacArthur catalyzed Japan’s remarkable industrial recovery, transforming it into a formidable economic juggernaut in just a generation.
Analogous US alliances, along with technology transfers and open market policies, spurred the meteoric rise of the Asian Tigers: South Korea, Taiwan, Singapore, Hong Kong, and ultimately, China.
China’s contemporary trajectory mirrors this engagement with the US. During the late 1970s and 1980s, Deng Xiaoping’s “reform and opening up” agenda—epitomized by his pragmatic assertion, “It doesn’t matter whether a cat is black or white, as long as it catches mice”—attracted substantial American investment, technology, and manufacturing capabilities.
Former Presidents Jimmy Carter and Ronald Reagan endorsed policies that facilitated the offshoring of American manufacturing to China.
These measures, including the shuttering of domestic production facilities in exchange for lower costs and enhanced market access, catalyzed China’s evolution into a manufacturing behemoth at the expense of America’s industrial foundation, thereby undermining the middle class and fostering acute reliance on Chinese supply chains.
In subsequent decades, geopolitical transformations, trade frictions, and the specter of supply chain vulnerabilities have triggered a pronounced reversal.
With Donald Trump returning to the Oval Office and championing the “Make America Great Again” initiative, current policies seek to dismantle remnants of the Reagan-era strategies by advocating for reshoring, “friend-shoring,” and diversifying supply chains away from China.
This trend has pivoted major American corporations toward alternatives such as India, which, boasting the world’s largest population and a burgeoning, youthful workforce, is strategically positioning itself to capitalize on demographics, government incentives, and geopolitical alignment for high-value manufacturing.
A notable instance is Apple’s assertive diversification in iPhone production. In 2025, the company manufactured approximately 55 million iPhones in India, marking a 53% year-on-year increase from 36 million, translating to nearly one in four (around 25%) of all iPhones produced globally.
Apple has expanded its assembly operations to include its entire current lineup, featuring premium models such as the iPhone 17 Pro and Pro Max. This escalation is largely attributable to US tariffs on Chinese imports, a concerted effort to mitigate geopolitical risks, and India’s burgeoning engineering ecosystem.
This expansion exemplifies Apple’s strategy to bolster resilience through the diversification of manufacturing locations, thereby decreasing vulnerability to tariffs and various other risks associated with excessive reliance on China, which continues to dominate the majority of production.
India’s ascent as a smartphone manufacturing hub has also been significantly propelled by government initiatives.
The flagship Production-Linked Incentive (PLI) scheme, which is set to expire in March 2026 after having catalyzed explosive growth, led to smartphone production soaring to nearly $60 billion (R1.02 trillion) in fiscal 2024-25—an astonishing 28-fold increase over a decade.
Exports reached around $21.7 billion (a 127-fold increase), thereby positioning smartphones as India’s leading export category in 2025, with broader estimates projecting calendar-year exports around $30 billion.
To sustain this upward trajectory, India is reportedly preparing fresh incentives slated for April 2026, which are expected to link subsidies to export performance and increased utilization of local components.
Such measures directly benefit Apple, Samsung, and their supply chains, aligning with Prime Minister Narendra Modi’s ambition to scale electronics manufacturing to $500 billion by 2030.
The ongoing contest for supremacy in high-tech manufacturing, particularly in the smartphone sector, mirrors historical patterns in which American influence has propelled emerging powers forward.
As the US advocates for diversification away from China, accentuating domestic strength, India stands poised to capture an increasing share of what was once China’s preeminent role, reconfiguring global supply chains for Apple and beyond.
Looking to the future, the McKinsey Global Institute, in its reports—such as the January 2025 analysis on demographic shifts and the June 2025 exploration of India’s growth potential—highlights India’s prospects for significant advancement within the global economic landscape.
While many advanced economies grapple with declining fertility rates that impede long-term growth, India’s window to harness its considerable workforce remains open for approximately three additional decades.
To ascend among the world’s largest economies by mid-century, possibly even claiming the second-largest position in certain projections, India must focus on expedited technological advancements.
Strategic investments in digital infrastructure, artificial intelligence, automation, and high-yield sectors will be vital to foster innovation, elevate efficiency within industries like electronics manufacturing, and sustain momentum in the increasingly competitive technology landscape before demographic advantages begin to wane.
Source link: Sundayindependent.co.za.
