India and China, two of the world’s fastest-growing economies, often find themselves compared across industries. While India has historically outperformed China in certain areas, such as traditional automobile manufacturing, the same cannot be said for electronics, where China reigns supreme. This gap becomes even more apparent with the rise of electric vehicles (EVs), where electronics play a central role. But why does India struggle so much in this space? Let’s dive into the historical, industrial, and geopolitical factors behind this disparity.

Historical Perspective 📜

India’s industrial focus post-independence was on heavy industries like steel, textiles, and automobiles, spurred by leaders like Jawaharlal Nehru. While this laid a foundation for growth in certain sectors, it sidelined high-tech manufacturing, including electronics.

China, on the other hand, made bold reforms under Deng Xiaoping in the late 1970s. By opening up its economy and creating Special Economic Zones (SEZs), China positioned itself as a global manufacturing hub. Electronics became a focal point of its industrial policy, with the government heavily investing in research, infrastructure, and workforce development.

In contrast, India took longer to liberalize its economy (1991), and by then, China was already years ahead in electronics manufacturing.

The Rise of Chinese Electronics 📈💻

1. Government Policies:

China aggressively incentivized the electronics industry. Subsidies, tax breaks, and state-backed financing allowed companies like Huawei, Xiaomi, and Foxconn to scale up rapidly.

2. Infrastructure and Supply Chain:

China developed world-class infrastructure with ports, highways, and factories strategically connected. This allowed seamless production and export of electronic goods.

India, however, still struggles with patchy infrastructure and bureaucratic red tape, increasing costs and delays for manufacturers.

3. Scale and Workforce:

With a massive pool of skilled and semi-skilled workers, China achieved economies of scale that India could not. Manufacturing electronics requires precision, consistency, and speed—qualities that China mastered through decades of focused effort.

India’s Automobile Legacy 🚗

India’s success in traditional automobiles stems from its early investments in companies like Tata Motors, Mahindra, and Bajaj Auto. Global players like Maruti Suzuki and Hyundai set up plants, leveraging India’s skilled workforce and growing domestic market.

However, EVs introduce a new challenge: they rely heavily on batteries, sensors, and semiconductors—areas where India lags. While Indian automakers excel at chassis and engine design, the EV revolution is shifting the spotlight to electronics and software, where China dominates.

Why India Can’t Compete in Electronics (Yet) ⚠️

1. Lack of Semiconductor Manufacturing:

Semiconductors are the backbone of modern electronics. China has invested billions in developing fabs (fabrication plants), while India has none operational yet. Without a domestic semiconductor industry, India relies heavily on imports, making it vulnerable to global supply chain disruptions.

2. R&D Investment Gap:

China spends around 2.4% of its GDP on research and development (R&D), while India spends less than 1%. This has a direct impact on innovation and technological advancements.

3. Skill Gap:

Electronics manufacturing demands a workforce trained in microelectronics and precision engineering. India’s education system focuses more on IT and software, creating a skills mismatch.

4. Dependence on Imports:

India imports over 85% of its electronic components, mainly from China. This dependence stifles domestic production and innovation, as Indian manufacturers simply assemble imported parts rather than producing them locally.

China’s EV Electronics Dominance ⚡🚗

China’s dominance in EVs is no accident:

  • Battery Manufacturing: Companies like CATL make China the leader in lithium-ion batteries, which power EVs. India’s battery industry is still nascent.
  • Consumer Electronics Ecosystem: Decades of experience in making smartphones, laptops, and other consumer electronics gave China a head start in EV electronics.
  • Government Push: Subsidies and aggressive targets helped Chinese companies scale quickly in both EV manufacturing and infrastructure (like charging stations).

What Can India Do to Catch Up? 🚀

While India faces significant challenges, it’s not impossible to close the gap. Here’s what needs to happen:

1. Build Semiconductor Fabs:

The Indian government has announced plans to invest in semiconductor manufacturing. Success here could reduce dependence on imports.

2. Encourage R&D:

Higher investment in electronics R&D is critical. Collaborations between academia and industry can foster innovation.

3. Focus on Skilling:

Programs like Skill India need to prioritize training in microelectronics, chip design, and precision manufacturing.

4. Strengthen Policy Frameworks:

Simplifying regulations and providing incentives for electronics manufacturers can attract global players.

The Road Ahead 🛣️

India has shown resilience and innovation in other sectors, from IT to automobiles. However, the electronics industry requires long-term vision, heavy investments, and government support. If India can tackle its infrastructure gaps, build a robust semiconductor ecosystem, and focus on R&D, it has the potential to emerge as a significant player.

Until then, China’s dominance in electronics will continue to shape the future of industries like EVs.

Conclusion 🌏

India’s struggles in electronics are a combination of historical neglect, inadequate infrastructure, and underinvestment in R&D. However, India can turn the tide.

The EV revolution is a wake-up call. Will India seize the moment? Only time will tell.