Written by Holly Teeters
As war with China hangs on the horizon, the United States primes India to take over China’s role on the global stage. Coined “friend-shoring,” the US and other Western countries are looking for more predictable economic relationships that won’t be uprooted by a cold war with China and geopolitical tensions with Russia (“US Treasury,” 2023). In layman’s terms, the US is looking to befriend the fastest-growing economy and population in the world – since it clearly didn’t work out with China.
India is on its way to becoming the third-largest economy in the world by 2027 (“India will be,” 2023). Similarly, with its high population growth rate, India is poised to surpass China’s population by mid-2023 (Rajesh, 2023). The combination of these two critical factors paves the way for India to take on a large share of world manufacturing and makes it an ideal replacement for China as the US gears up for a cold war. Furthermore, India maintains a strong relationship with Russia and could help manage geopolitical tensions with Putin due to the war with Ukraine (Menon & Rumer, 2022). Thus, there are many sound reasons for the US to get its foot in the door with India as it rapidly comes to the forefront of geopolitics and manufacturing. Apple has already moved its manufacturing from China to India to ingratiate itself in the large smart-phone market early on – an enormous step in the greater transition towards US-India trade relationships. Microsoft is following suit (Douglis, 2023).
India’s government itself is subsidizing the move of large companies into the country. Because India’s demographics skew young with a median age of 28, as compared to China’s which is 38, there is a quickly growing labor force of young people who need jobs. India has a lower than average manufacturing wage, giving India a similar edge to foreign companies (Douglis, 2023). Incentivizing the relocation of manufacturing into India will provide the large supply of labor with jobs, buttress the growing middle class, and allow India to develop closer market ties to wealthy countries.
Politicians continue to demonize China, an undercurrent that will soon sweep up the country in typical war-driven nationalist rhetoric. That is not to say some criticisms of China aren’t valid; the US is investing in solar power in India as an alternative to the “forced labor solar camps” of the Muslim ethnic group in Xinjiang (Kaplan et al., 2021). However, the argument that India is a more ethical manufacturing alternative to China may be overplayed. The US government declares the “U.S.-India strategic partnership is founded on shared values including a commitment to democracy and upholding the rules-based international system,” praising India as a pro-democracy all-American alternative to China (“U.S. Relations,” 2023). Is this narrative really the case?
Ironically, India’s relationship with its own Muslim minority suggests not. A new British documentary by the BBC has brought to light PM Modi’s role in violent anti-Muslim riots in 2002 that killed more than 1,000 people. In response to the documentary accusing him of inspiring and allowing the atrocity to happen, Modi has attempted to censor the documentary across India by shutting off access to the internet and raiding the New Delhi BBC office on the grounds of “tax evasion” investigations (Ellis-Peterson, 2023). Many worry that if Modi is elected again, he will officially proclaim India a Hindu nation. In turn, Modi would effectively shift India from a democracy with free speech and dissent to an autocracy.
Despite such international criticism – particularly from Britain – Modi’s ratings are as high as ever. He has won two elections in a row and is projected to win for a third time in the upcoming election (Pradhan, 2022). Modi’s supposed compliance with human rights violations is, therefore, of little consequence to the Hindu majority who desire a Hindu nation under his leadership. Perhaps now that Apple has relocated to India and the US aims to integrate more crucial supply chains, we won’t be quick to punish him either.
Australia is also engaging heavily with India as a recent trade partner, seeking $100 billion in bilateral commerce by the end of 2023. In return for “minerals” involved in solar manufacturing (coal, copper, and gold), Australia is getting the vast majority of imports from India tariff-free, and access to India’s “start-up ecosystem” (“India, Australia,” 2023). Indian immigrants are currently the second largest immigrant group in Australia, strengthening the two countries’ relationship further (Pandey, 2022). By ingraining themselves in India’s economic development, Australia and the United States hope to reap the benefits of a symbiotic manufacturing relationship. Political leaders would be remiss to apply the same criticisms of China to their newest manufacturing powerhouse.
In the next year, we will likely see more companies abandon their operations in China to friendshore in India. Alongside this economic shift, negative political discourse about China will begin to pick up. As the official grounds for the US-India trade relationship (commitment to democratic values) actively slip away under PM Modi’s Hindu nationalism, it will be interesting to see how the US media portrays its relationship with a potential autocrat. Of course, it’s hard to imagine any real pushback to Modi’s anti-Muslim and censorship policies as long as they don’t impact US investments. Looking at America’s own history of Muslim xenophobia, why would it care about the slow cleansing of Muslims in India? Certainly not when there is a war to win and money to manufacture.
References
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Ellis-Petersen, Hannah. “What Is the BBC Modi Documentary and Why Is It so Controversial?” The Guardian, Guardian News and Media, 14 Feb. 2023, https://www.theguardian.com/world/2023/feb/14/why-is-bbc-report-on-narendra-modis-handling-of-sectarian-riots-in-2002-so-controversial.
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Pandey, Swati. “Moving down under: There Are Now More Indian Migrants than Chinese in Australia.” Bloomberg.com, Bloomberg, 26 Apr. 2022, https://www.bloomberg.com/news/articles/2022-04-26/indian-born-australians-post-biggest-migrant-gain-in-past-decade#xj4y7vzkg.
Pradhan, Bibhudatta. “Modi Ruling Coalition Likely to Win India Majority in 2024 after Ally’s Exit.” Bloomberg.com, Bloomberg, 12 Aug. 2022, https://www.bloomberg.com/news/articles/2022-08-12/modi-remains-frontrunner-for-2024-elections-despite-exit-of-ally.
Rajesh, YP. “India’s Population to Overtake China by Mid-2023, UN Estimates.” Reuters, Thomson Reuters, 20 Apr. 2023, https://www.reuters.com/world/india/india-have-29-mln-more-people-than-china-by-mid-2023-un-estimate-shows-2023-04-19/.
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“US Treasury Secretary Pitches for ‘Friendshoring Strategy’ with India to Bolster Supply Chains. What Is It?” Hindustan Times, 25 Feb. 2023, https://www.hindustantimes.com/world-news/us-treasury-secretary-pitches-for-friendshoring-strategy-with-india-to-bolster-supply-chains-what-is-it-101677317603529.html.