The Goal of India's Industrial Policy Should Be Profits, Not Votes
Playing political games with government handouts is almost certain to backfire.
Apple’s exports from India are booming.
Photographer: Dhiraj Singh/BloombergBetween April and October, Apple Inc. exported about $7 billion worth of iPhones from India, most of them to the US. Prime Minister Narendra Modi can claim that as a victory for his government’s manufacturing subsidies, the closest the country has come to industrial policy in decades. In 2019, before Modi’s push, phone exports to the US barely crossed $5 million.
The government has handled Apple the right way, giving the company a great deal of freedom in choosing where to locate its factories and making sure that India’s often fractious labor relations haven’t disrupted its operations. The temptation, though, is to seek not just economic but political dividends from state largesse. Modi should look to the recent experience of the US to understand how unwise that is.