India Seeks New Ways to Shift Manufacturing Away from China

• India seeks to shift electronics and semiconductor manufacturing from China.
• GST rate simplification to boost industry growth and festive season consumption.
• Global firms from U.S., Taiwan, Korea, and Europe encouraged to invest in India

India is ramping up the campaign to claim electronics and semiconductor manufacturing from China, according to S. Krishnan, Secretary of the Ministry of Electronics and Information Technology (MeitY), when he spoke with CNBC-TV18 on September 5, 2025. Krishnan explained that India is looking to capture a piece of China's dominant electronics manufacturing capacity, and becoming an alternative source for global corporations (including corporations based in the U.S., Taiwan, Korea, and Europe). This comes on the heels of India's broader strategy to take advantage of geopolitical tensions and U.S. tariffs on Chinese goods to diversify supply chains.

Krishnan pointed out that the recent reforms to the GST tax regime will spur growth in the industry. Simplified GST rates and reduced GST rates will ultimately provide a more favourable business environment and facilitate domestic consumption growth for electronics and white goods, especially leading up to the festive season.

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The reforms are expected to drive industry-wide volumes and provide momentum for India's economic growth. The government is not only focused on Chinese investments but aims to foster an ecosystem for global players. For instance, the India Semiconductor Mission (ISM) has driven projects worth $18 billion in investments across ten semiconductor facilities since 2021.

India's electronics manufacturing industry is expected to reach $300 billion by 2026, with initiatives like the Electronics Component Manufacturing Scheme (ECMS) and SPECS aimed at reducing import dependence and increasing value added. Together with GST reforms, these initiatives strengthen India's position as a viable option for manufacturing diversification.