Will India’s lofty manufacturing ambitions bear fruit?

This report is from this week’s CNBC’s “Inside India” newsletter which brings you timely, insightful news and market commentary on the emerging powerhouse and the big businesses behind its meteoric rise. Like what you see? You can subscribe here.

India has long been thought of as the world’s back-office, while its Asian counterpart China claimed the title of global factory powerhouse.

Those classifications held true for decades as India grew its capabilities in global command centers and other information technology services while China dominated large-scale manufacturing.

India’s economic focus shifted to a new target when its government declared that manufacturing would spur its economy to high-income status by 2047.

The central government’s launch of the “Make in India” initiative in September 2014 kicked off a move to galvanize efforts in becoming a manufacturing hub. Its intent was clear: to develop India’s manufacturing capabilities in sectors like automotives, electronics, pharmaceuticals and aerospace while creating opportunities for locals.

In the 10 years since the launch of “Make in India,“ the government has dished out varied support measures such as the Production Linked Incentive Scheme, which supports businesses both local and foreign in planting roots in India. With an outlay of 1.97 trillion Indian rupees ($24 billion), 14 sectors are being leveraged under the PLI based on factors like their scope to reduce imports, boost exports and create employment.

From tech hub to iPhone manufacturer

To witness India’s progress from a tech hub to a manufacturer, one merely needs to journey north from its own version of Silicon Valley in Bengaluru.

Approximately 65 kilometers (40 miles) northeast in the district of Kolar lies a Tata Group-owned facility that manufactures iPhones for tech giant Apple. The Tata Group became the first Indian company to manufacture iPhones after acquiring Taiwanese firm Wistron‘s operations last October.

Another iPhone facility will soon be 45 kilometers away from Bengaluru in Doddaballapura. Run by Foxconn, around 20 million iPhones are expected to be produced here annually, once it commences operations.

With 14% of iPhones being made in India, the nation is now the largest producer of the smartphone after China, according to Indian Prime Minister Narendra Modi. Apple has plans to raise this to 24% to 25% between 2027 and 2028.

Foxconn is among a growing number of contract manufacturers setting up shop in India to capitalize on its reservoir of workers seeking employment. The firm now has over 30 factories in India employing some 40,000 workers.

Like the Tata Group, other Indian firms have also jumped on the bandwagon. For instance, Dixon Technologies is among India’s largest electronics manufacturers and has progressed from making gadgets like home appliances and surveillance systems for…