INDIA INDUSTRY · MAY 2026
Special Report
Make in India
vs China+1
India promised 100 million manufacturing jobs by 2022 and 25% of GDP by 2025. The receipts are in.
$48bn
Electronics
↑24% FY26
$0.35bn
Net FDI
↓96.5% YoY
−16M
Mfg jobs
2017→2023
12.5%
Mfg GDP
vs 25% promise
Receipt · iPhone · PLI · China+1 · Beat · Verdict
Swipe
02
Promise · Capital · Sectors
The full receipt in one frame
APromised by 2022–25 → Delivered 2026
Mfg share GDP
25% → 12.5%
Flat since FY14 · World Bank
Mfg workforce
+100M → −16M
51M (2017) → 35M (2023)
Global mfg rank
Top 3 → #5–6
Behind China · US · Japan · Germany
BWhere China+1 capital went · mfg FDI 2024 · USD bn
Indonesia
$55.3
Mexico
$40.9
Vietnam
$25.6
India NET
$0.35
India money flow
Gross in$81.0bn
Repatriated out−$51.4bn
Outward FDI−$29.2bn
= NET$0.35bn
CSector scorecard · capital-intensive wins · labour-intensive losses
✓ Wins2
Smartphones
$48bn exports · 44% US share
Pharma
$30.5bn · net bulk drug exporter
~ Mixed2
Defence
34× FY14 · missed $5bn target
Semis
Tata 28nm fab late 2026
✗ Losses3
EVs
Tesla ruled out · 2.5% sales
Textiles
0 plants · 64 approvals · 2 yrs
Footwear
PLI ignored · BD/VN dominate
Gravitywell Research
02 / 07
03
India assembles. China supplies.
The iPhone paradox
Global iPhone
from India
~25%
↑ from 6% in 2023
India iPhone
exports '25
$23bn
↑85% YoY · #1 export
India value per
$1,000 iPhone
<$30
Much returned to
Apple as PLI subsidy
DVA actual
vs 40% target
18–20%
MeitY · ICEA est.
Where the $1,000 iPhone goesillustrative · GTRI
Apple US
~$450
Taiwan
~$150
S. Korea
~$90
Japan
~$85
India
<$30
India's
iPhone share
trajectory
6%
2023
18%
2024
25%
2025
Beijing's
Throttle
Foxconn recalled ~300 Chinese engineers (Jul + Aug 2025) — Beijing's instruction to restrict tech transfer. Mar 2025: Apple chartered cargo planes to airlift $2bn iPhones from India pre-tariff. India still imports 88% chips · 94% batteries · 96.6% laptops from China.
Gravitywell Research
03 / 07
04
PLI: 37% of target hit
Govt claims one number. Reuters did the maths.
PLI Utilization · Just 7.2% of Budget Paid
Govt budgeted $24bn / ₹1.97 lakh cr across 14 sectors. Actually disbursed: $1.73bn (7.2%). Reuters: only 37% of production target hit · 94% of payouts to electronics + pharma alone.
↑
Electronics + Mobiles · ₹15,473cr disbursed — clear winner. Apple, Samsung, Foxconn, Dixon scaled. Drives $48bn export print. Tata's share rose 13% → 37% in one year.
↑
Pharma · ₹2,328cr disbursed — $30.5bn exports FY25, +9.4% YoY. Net bulk drug exporter achieved. 191 new APIs made in India.
→
Auto · ₹2,322cr · Telecom · ₹840cr — moderate flow. Defence exports 34× FY14 but missed $5bn target.
↓
Steel · Solar · IT Hardware · only ₹390cr combined. 14 of 58 steel projects withdrawn · 8 of 12 solar firms will miss targets (MNRE Dec 2024).
↓
Textiles ₹40cr · ACC Batteries ₹0 — critical failure. 64 of 67 textile approvals built zero plants in 2 years. ₹18,100cr battery outlay sits untouched.
Gravitywell Research
04 / 07
05
The China+1 Scoreboard
5 countries · 6 metrics
Metric India Vietnam Mexico Bangladesh Indonesia
Mfg % GDP2024 12.5% 24% 18% 21% 22%
Mfg wageUSD/month ~$100 $321 ~$540 ~$110 ~$280
US tariffreciprocal 2026 18% 20% 0% 37% 19%
FTAs signedapprox 13 17 14 2 12
Mfg FDI2024 · USD bn 0.35 25.6 40.9 3.5 55.3
Edge sectorglobal # Phones Electronics Autos RMG Nickel/EV
Read the
matrix
India leads only in US tariff arbitrage (18%) and the new phone-assembly category. On every structural metric — wages, FDI retention, mfg %GDP, FTAs — at least one rival is ahead.
Gravitywell Research
05 / 07
06
Who Beat India · Who India Beat
Sector-by-sector head-to-head
↓ India is behind in
Where China+1 capital flowed to rivals
Garments / RMG vs Bangladesh · Vietnam
India global share 3.5% (down from 4.5% in 2013) · Vietnam 5.9% · Bangladesh 5.1%. Wage gap structural.
Autos / Aerospace vs Mexico
Mexico 0% US tariff + USMCA + 2–5 day overland. Tesla ruled out India mfg.
Electronics depth vs Vietnam
Vietnam mfg FDI $25.6bn vs India NET $0.35bn. Deeper component ecosystem.
EV batteries / Nickel vs Indonesia · China
India ACC battery PLI: ₹0 disbursed. Indonesia $55bn nickel-downstreaming, China supplies 94% global batteries.
↑ India pulled ahead in
Where the China+1 wave actually landed
US smartphones vs China
India 44% US share Q2 '25 (up from 13%). China dropped from 61% → 25%. iPhone assembly leapfrogged.
Generic pharma vs everyone
$30.5bn exports · 60% of global vaccines · US 34.5% of India pharma sales. Net bulk-drug exporter status.
US tariff arbitrage vs China · Bangladesh
India 18% (Feb '26 deal) vs China 20% → 44% (Nov '26) · Bangladesh 37%. Best major-Asia rate.
Defence exports vs historic India
34× growth since FY14 · ₹23,622cr. BrahMos, ALH Dhruv to Philippines, Armenia. Beat own past — not yet S. Korea or Turkey.
Gravitywell Research
06 / 07
07
The Honest Bottom Line
Foot in door · not yet an ecosystem
✓ Genuine wins
✓
#1 US smartphone supplier · 44% Q2 '25
✓
$48bn electronics + $30.5bn pharma exports
✓
Logistics costs halved to <8% of GDP
✓
Labour codes enacted · Dholera fab on track
✓
Feb '26 US deal: tariff 25% → 18%
"Won the assembly contest, decisively."
✗ Hard truths
✗
Mfg GDP 12.5% — flat since FY14
✗
Mfg workforce 51M (2017) → 35M (2023)
✗
Net FDI $0.35bn · ↓96.5% YoY
✗
<3% iPhone value captured · 18–20% DVA
✗
88% chips · 94% batteries from China
"…not the broader manufacturing war."
What to
watch
2026–28
Late 2026
Dholera
Tata-PSMC 28nm fab live
2027
DVA >30%
iPhone deep mfg signal
2027
Labour codes
All-state implementation
2028
Land reform
National fast-track passed
Sources · verified World Bank · RBI (May 2025) · Vietnam MPI · Canalys (Jul 2025) · GTRI · Reuters (Oct 2024) · MNRE (Dec 2024) · Bloomberg (Aug 2025) · White House (Feb 2026) · MeitY · ICEA · Dallas Fed · BNP Paribas
Gravitywell Research
07 / 07