China-Plus-One Was Just China All Along

India's electronics manufacturing self-reliance strategy requires reliance on its biggest rival

India’s blueprint for displacing China as the world’s electronics workshop contains a rather extraordinary feature: the entire Indian edifice requires Chinese companies to supply the technical architecture, manufacturing know-how and operational templates that would make such displacement theoretically possible.

Let’s start with Dixon Technologies, India’s flagship domestic electronics manufacturer. The company has systematically built indigenous capability through a growing constellation of Chinese partnerships: Longcheer provides the design intelligence, Kunshan Q-Tech delivers camera module expertise, Chongqing Yuhai supplies precision-molded components and HKC brings display technology.

This pattern of structured dependence has become the organizing principle of India’s electronics manufacturing push. The government allocated nearly $7 billion in production-linked incentives, projecting a domestic market worth $300 billion by 2026 — ambitious numbers that obscure the underlying reality.

Epack Durables produces air conditioners through its partnership with Hisense. Bhagwati Products, which manufactures for the faded Indian brand Micromax, now seeks resurrection via Huaqin, another Chinese original design manufacturer. This partnership has allowed Bhagwati to rapidly scale its smartphone production and it now finds itself in direct competition with Dixon for contracts from Chinese phonemakers Vivo and Oppo.

The Chinese firms themselves are active participants in this evolving dance. Brands like Xiaomi, Realme and OnePlus, which dominate India’s vast smartphone market, are increasingly outsourcing the production of their audio and Internet of Things devices to local partners like Optiemus Infracom. For them, it is a prudent move to diversify their manufacturing footprint, de-risk from geopolitical tensions and capitalize on India’s production-linked financial incentives.

The logic works well enough in the immediate term. Indian companies acquire manufacturing capabilities that would otherwise demand perhaps decades of incremental development and billions in R&D spending they cannot afford. Chinese firms, hemmed in by trade restrictions and slowing domestic growth, preserve revenue channels and market access through the back door. But the deeper achievement belongs to China: these arrangements ensure their technical standards become load-bearing elements in the industrial infrastructure of the nation explicitly positioning itself as their replacement.

New Delhi’s officials green-light these ventures while publicly championing atmanirbhar (self-reliance) as national doctrine. The implicit wager is that today’s technological dependence will somehow transmute into tomorrow’s manufacturing autonomy. This theory requires remarkable faith that two nuclear-armed states with active border disputes and deepening strategic rivalry will maintain sufficiently cordial commercial relations to permit uninterrupted technology transfer even as their economic competition escalates toward direct confrontation.

This has implications for Western corporations attempting to de-risk from China. The Indian operations they’re betting on as alternatives remain structurally dependent on Chinese technology — the supply chain hasn’t been diversified so much as given an additional mailing address. Rather than achieving “China plus one,” they’ve created something more accurately described as “China-with” — a configuration where Chinese technical capabilities form the indispensable foundation beneath India’s manufacturing ambitions.

The historical precedent India’s planners invoke — Japan’s absorption of American technology during the 1960s — overlooks a rather significant distinction. Tokyo was building its industrial base using technology from its security guarantor, not from a strategic adversary with which it maintained active territorial disputes and had fought a war within living memory. India’s gamble assumes it can extract enough expertise to achieve technological autonomy before Beijing calculates that enabling a rival no longer serves Chinese interests — or before some border incident provides the pretext to instruct Chinese firms to cease cooperation.

The current architecture sees Chinese companies retain control of the critical knowledge while their Indian partners provide labour arbitrage and regulatory navigation. Under this arrangement, India isn’t constructing an alternative to Chinese manufacturing so much as establishing Chinese manufacturing’s most elaborate subsidiary operation, underwritten by Indian taxpayers and marketed as national renewal.