Addressing China’s e-supply chain weaponization

• China’s zero sum measures have expanded geopolitical competition with India through regulations on capital flow and production factors.

• China intends to curb the transfer of knowledge from Chinese technicians to Indian counterparts on the assembly line.

• The disruptions due to non-availability of specialized equipment are crippling.

India’s Manufacturing Sector

• India’s manufacturing sector is critical to India’s ambitions of becoming a global manufacturing power.

• The Indian government and State governments have been promoting Apple-Foxconn’s investments in the southern part of the country.

• In 2023, Apple assembled $14 billion worth of iPhones in India through Foxconn, Pegatron, and Tata Electronics.

The ‘Make in India’ Programme

• Large-scale electronics manufacturing, especially smartphones, is one of the important pillars of the ‘Make in India’ programme.

• The Production-Linked Incentive (PLI) scheme has witnessed increased allocation by the central government.

• Over three financial years, Apple’s contract manufacturers in India received close to ₹6,600 crore ($0.76 billion) from 2022-23 to 2024-25.

India’s Long-Term Strategy

• India needs to involve both Apple and Foxconn to negotiate with China for easing Beijing’s latest measures.

• The National Manufacturing Mission for small, medium and large industries needs credible financial muscle.

• On-site training for workers, including tacit knowledge sharing on the assembly line, needs to be complemented and augmented with industry-specific specialisation in skill development programmes. More private capital needs to be encouraged to create a robust network of indigenous contract manufacturers for both foreign corporations and domestic Indian brands.

Inflation in India: A Break from Inflation and Risks

• Inflation in India dropped to a five-month low of 6% in January due to a healthy winter harvest of vegetables.

• Urban consumers saw a 3.9% inflation ease, while rural consumers saw a 4.6% price increase.

• This relief for households, especially the urban middle class, is expected to have broader implications for consumption and growth.

• The Reserve Bank of India (RBI) has slashed interest rates in anticipation of declining inflation.

• The RBI predicts an average inflation of 4.4% in 2025-26, potentially leading to a minor price rise from January’s 4.3% rise.

• However, imported inflation could pose a threat, particularly on fuels and edible oils, which constitute 60% of India’s consumption needs.

• Edible oil prices have been rising sharply, with wholesale prices for edible oils jumping 33.1%.

• The RBI may hold off on its growth pursuit if necessary to curb the rupee’s volatility.

• To alleviate price pressures, the government should be open to slashing indirect taxes, such as fuel levies, import duties, and GST.

Peace Implications

• President’s Rule in Manipur provides an opportunity for peace.

• The rule allows the Union government to ease tensions and work on pressing issues like the displacement of over 60,000 people.

• The rule also allows for talks between representatives of the two communities in the conflict, especially those committed to peace.

India-U.S. Bilateral Trade and Illegal Migration Issues

• The growing militarisation of civil society, particularly among the Kuki-Zo community, has led to the emergence of “village volunteers” who have been looted from constabularies.

• The militarisation in the new ethnic conflict has been complicated by the expanded role of insurgents who were fighting the Indian state or engaged in the Myanmar civil war.

• The Biren Singh regime’s perceived bias in leadership and Mr. Singh’s tendency to stigmatize the Kuki-Zo community has hindered efforts to disarm these volunteers and tackle the insurgents.

• The government, armed forces, and civil society actors need to work together to disarm these volunteers and tackle the insurgents.

• The Home Ministry should work on a war-footing to restore peace and extinguish the climate of fear and reprehension from violent groups.

• India-U.S. bilateral trade is expected to reach $500 billion by 2030.

• The two countries agreed to work on Small Modular (nuclear) Reactors for India and to fully operationalize the U.S.-India 123 Civil Nuclear Agreement.

• India and the U.S. announced a partnership, “Transforming the Relationship Utilising Strategic Technology” (TRUST), to enhance cooperation across government, academia, and the private sectors.

• The two sides plan to convene partners of the IMEC (India-Middle East-Europe Corridor) group and I2U2 (India, Israel, the U.S. and UAE) within six months to announce new initiatives.

• On illegal migration, Mr. Modi and Mr. Trump agreed to streamline legal mobility for students, professionals, short-term business, and tourist travel.