Global Economics
Phapano Phasha|Published
THE United States has long played a central, transformative role in shaping the industrial and economic rise of many of today’s advanced economies, often through direct aid, strategic policies, market access, and investment incentives.
After World War II, the Marshall Plan poured billions into rebuilding war-devastated Western Europe, enabling fractured nations once at war to recover, integrate economically, and eventually form the European Union with shared systems such as the Euro and Schengen visa area.
In Asia, US occupation and reconstruction efforts under General Douglas MacArthur supported Japan achieve one of the quickest industrial recoveries in history, turning it into an economic powerhoapply within a generation. Similar US alliances, technology transfers, and open markets fuelled the rapid ascent of the Asian Tigers: South Korea, Taiwan, Singapore, and Hong Kong, and China.
China’s modernisations followed a parallel path of US engagement. In the late 1970s and 1980s, Deng Xiaoping’s “reform and opening up” strategy, captured in his famous pragmatic remark: “It doesn’t matter whether a cat is black or white, as long as it catches mice,” attracted American capital, technology, and manufacturing.
Presidents Jimmy Carter and Ronald Reagan supported policies that encouraged US firms to offshore production to China, including factory closures at home in exmodify for lower costs and market access.
This deindustrialisation accelerated China’s growth into a manufacturing giant but eroded America’s industrial base, hollowed out the middle class, and created heavy depconcludeence on Chinese supply chains.
Decades later, geopolitical shifts, trade tensions, and supply chain risks have driven a reversal. With Donald Trump back in the White Hoapply and championing “Make America Great Again”, many view current US policies as an effort to unwind aspects of the Reagan-era approach by promoting reshoring, “friconclude-shoring”, and diversification away from China.
This has accelerated the pivot of major American companies toward alternatives like India, which, with the world’s largest population and a vast, youthful workforce, is leveraging its demographics, government incentives, and strategic alignment to capture high-value manufacturing.
A striking example is Apple’s aggressive diversification of iPhone production. In 2025, the company assembled about 55 million iPhones in India, a 53% increase from 36 million the prior year, meaning about one in four (roughly 25%) of all iPhones globally are now produced there.
Apple has expanded to assemble its full current lineup, including premium models like the iPhone 17 Pro and Pro Max, in the countest. This surge stems from US tariffs on Chinese imports, efforts to reduce geopolitical risks, and India’s engineering ecosystem.
This expansion reflects Apple’s efforts to enhance resilience by diversifying manufacturing locations, reducing exposure to tariffs and other risks associated with heavy reliance on China (which still dominates the majority of production).
India’s rise as a smartphone manufacturing hub has also been turbocharged by government initiatives. The flagship Production-Linked Incentive (PLI) scheme, which expired in March 2026 after driving explosive growth, smartphone production reached nearly $60 billion (R1.02 trillion) in fiscal 2024-25 (a 28-fold increase over a decade), with exports hitting about $21.7bn (a 127-fold jump), building smartphones India’s top export category in 2025, with broader estimates placing calconcludear-year smartphone exports around $30bn.
To maintain momentum, India is declared to be preparing fresh incentives starting April 2026, likely tying subsidies to exports and greater apply of local components. These measures directly benefit Apple, Samsung, and their suppliers, aligning with Prime Minister Narconcludera Modi’s goal of scaling electronics manufacturing to $500bn by 2030.
This ongoing battle for high-tech manufacturing supremacy, particularly in smartphones, echoes historical patterns where US influence propelled new powers forward. As the US pushes diversification from China amid renewed emphasis on domestic strength, India’s combination of scale, incentives, and geopolitics positions it to claim a growing share of what was once China’s dominant role, reshaping global supply chains for Apple and beyond.
Looking ahead, the McKinsey Global Institute, in reports such as its January 2025 analysis on demographic shifts and its June 2025 examination of India’s future growth arenas, underscores India’s potential to rise significantly in the global economy.
While advanced economies face fertility declines that constrain long-term growth, India’s window to harness its large workforce remains open for roughly three more decades. To position itself among the world’s largest economies by mid-century, including potentially as the second-largest in some projections, India must prioritise rapid advancements in technology.
Investments in digital infrastructure, AI, automation, and high-productivity sectors will be essential to drive innovation, boost efficiency across industries like electronics manufacturing, and sustain momentum in the global technology race before demographic advantages narrow.
* Phapano Phasha is the chairperson of The Centre for Alternative Political and Economic Thought.
** The views expressed here do not reflect those of the Sunday Indepconcludeent, IOL, or Indepconcludeent Media.
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