The Shanghai Institutes for International Studies (SIIS), one of China’s leading strategic think tanks, recently published a report titled Assessment of India’s ‘Alternative to China’ Strategy in Global Industrial and Supply Chains, which critically examines India’s ambition to position itself as a manufacturing alternative to China. Authored by Liu Zongyi, Tan Chenyi, Ye Yu, and Li Hongmei, the report is significant not only for its depth of research and data, but also for the insight it provides into how Chinese analysts perceive India’s structural capabilities, limitations, and geopolitical alignments in the context of shifting global supply chains. For Indian policymakers and scholars, it serves both as an external assessment and a strategic warning.
The report argues that since the US-China trade war and the disruptions of the COVID-19 pandemic, India has increasingly pursued a policy aimed at shifting manufacturing and supply networks away from China. According to the authors, this strategy relies on ‘three substitutions’: replacing ‘Made in China’ with ‘Make in India’, using Indian or third-party capital instead of Chinese, and shifting industrial cooperation from a US-China model to one focused on India and the West. The report traces how the Indian government, under Prime Minister Narendra Modi, has used geopolitical openings such as the Galwan clash, pandemic-induced supply chain disruptions, and Russia’s war in Ukraine to pitch India as a more reliable, democratic, and de-risked manufacturing destination.
The report examines the policies India employed to drive this shift, including the Production Linked Incentive (PLI) schemes, import substitution measures, and restrictions on Chinese companies and acknowledges some level of success, particularly in smartphone manufacturing, where India has become a key site for Apple’s supply chain diversification. However, it asserts that these gains are sector-specific and not indicative of broader structural transformation. According to the report, India’s manufacturing continues to suffer from high dependency on Chinese inputs, particularly in sectors such as electronics, pharmaceuticals, solar energy, and automobiles. Although they are not optimistic about India’s domestic business environment, infrastructure, and institutional capacity, the authors caution Chinese policymakers not to underestimate India’s long-term ambition and strategic patience.
From an Indian perspective, the report presents a mixture of condescension and insight. While the tone is often dismissive and politically charged, it also reflects a clear-eyed recognition of India’s potential to emerge as a regional manufacturing competitor. Its treatment of India’s industrial policies as reactive or propagandistic underestimates the depth of India’s structural reforms and the long-term orientation of its geopolitical alignment. The claim that India has fabricated a narrative of growth for global consumption ignores the real and measurable improvements in sectors like electronics, renewable energy, and services exports. However, the report’s documentation of China’s continued dominance in Indian supply chains is largely accurate and disturbing. It also rightly points out that without sustained investments in logistics, energy, and education, India’s ambition to rival China at scale will remain aspirational.
There are several lessons that India can draw from this report, even though it is largely a politically motivated narration. First, India must be cautious not to overplay geopolitical alignments as a substitute for domestic competitiveness. The report rightly cautions against India’s excessive optimism about Western reindustrialisation flowing automatically toward the country. Second, India must align its supply chain strategy not on speculative global realignments alone, but on a realistic assessment of its internal bottlenecks, such as skills, logistics, and regulatory clarity. Third, the path to replacing China cannot be built purely on decoupling rhetoric or reactive policy; it must be grounded in a clear industrial vision suited to India’s socio-economic conditions. The criticism, that India’s approach lacks rational design and overestimates external interest, may be exaggerated in tone but offers a sobering mirror. India should use this to recalibrate its expectations and invest in long-term capacity rather than chase short-term geopolitical tailwinds. In doing so, it can transform current gaps into future gains and move from being an alternative to China to being a manufacturing power in its own right.
