Apple to invest in India: Can the country overtake China as a manufacturing leader?

In This Article:

Harvard Business School Professor of Management Practice Willy Shih discusses Apple's ongoing investments into India and breaks down how doing business in the country compares with doing business in China.

Video Transcript

- With concerns around China's economy and political tensions between Beijing and the west, India has become an attractive alternative for doing business. The country remains the fastest-growing economy in the world with a population to rival China's. And it's a big reason why Apple is betting big on the country. But is India really the next China?

Joining us now is Willie Shih, a professor of management practice at Harvard Business School. Professor, good to talk to you today. You know, amid all of the discussions about India being the next big market, I'm thinking back to 2014, which is when India said they would make this big push as the next design and manufacturing leader in the world. How is this opportunity different this time around?

WILLIE SHIH: Well, India has been talking about the great opportunity. I think one of the things that's really different is we saw it during the trade war during the Trump administration. A lot of people kind of were steadfast in their interest in China, you know, including companies like Apple.

But in some sense, I'd say the real turning point was a year ago, April, when we saw the lockdown in Shanghai because of COVID. And that was when a lot of people said, you know, I've got to diversify my supply chains.

And then when you look at some of the really labor intensive operations like, for example, assembling iPhones and things like that, where are your alternatives? Well, you can go to Vietnam. But Vietnam is kind of filling up. India is large population, large market as well.

So I think that was probably a turning point, if you will, where people started to say, you know, I got to try to make India work.

- The demographic comparison, the population is a big reason why so many have compared India to China. And yet you think back to past entries from, especially in multinational companies like Amazon, the hiccups always been about the infrastructure in place. It's not a unified market or as unified as it is in a place like China. To what extent has India really corrected some of those hiccups, and how ready are they for a potential push from a lot of these major companies looking at India as an alternative?

WILLIE SHIH: Well, I think there are a couple of obstacles. One of them is, as you say, infrastructure. China built a lot of infrastructure. They built export-oriented infrastructure, ports, rail roads to get exports out.