KSG Exec Brief: Make or Break India
Discover more from KSG Intelligence Services
KSG Exec Brief: Make or Break India
Geographic diversification, geopolitical risk, and enterprise considerations
Insight
Government investments in manufacturing have increased India’s role in producing consumer electronics as part of a national effort to make India a center for high-tech manufacturing. While India’s policies and demographics indicate long term economic potential, its recent political activities are worrisome. The alleged extraterritorial killing of a Sikh separatist and resulting diplomatic tensions with Canada, as well as recent court rulings against free speech, underline India’s complex political situation. As companies invest in India, they need to move forward cautiously and consider ways to reduce risk to their people and data.
Make in India
In the past decade, Indian government investments in manufacturing have made the country a prime location for global companies’ operations. Since Apple CEO Tim Cook met Indian Prime Minister Modi in 2016, Apple has ramped up iPhone production in the country. In 2021, the government launched a $24 billion subsidy which pays manufacturers up to 6% of the invoice price for each handset produced in India. Now, 95% of devices sold in India are manufactured locally.
Beyond government incentives, India’s workforce makes it an appealing manufacturing option, especially as companies diversify from China. India’s population recently surpassed China’s. India’s labor costs remain lower than China’s, and the country graduates 1.4 million engineers annually.
Push to Semiconductors
India’s government is now investing in silicon chip manufacturing. In PM Modi’s home state of Gujurat, the government is creating an industrial city called Dholera. PM Modi announced this Singapore-sized city would be the future of chip manufacturing with one company aiming to begin production as early as 2025. The city, which currently only has construction on 2.5% of the total planned area, will have housing and infrastructure at subsidized rates. This vision is years away from reality, but India’s efforts indicate its eagerness to compete in the global chip manufacturing game.
Proceed with Caution
Amidst high-tech industrial policy and eager attempts to woo western multinationals away from China, recent political action continues to raise concerns about the future of India’s democracy. Last month, Canadian Prime Minister Trudeau accused India of assassinating Hardeep Singh Nijjar, a Canadian citizen who advocated for an independent Sikh state. While India has denied these allegations, there are strong reasons to believe they hold merit. Aside from the shocking viciousness and illegality of the extraterritorial killing, the resulting tension between India and Canada threatens U.S. strategic efforts to bring India in a closer security partnership (i.e.,, the “Quad”) to counter China’s ambitions.
Meanwhile, this week an Indian court dismissed a legal petition challenging the federal government’s order to block disagreeable tweets and accounts. The decision has outraged free-speech advocates in the country. It reinforces India’s tendency to demand platform action, such as YouTube and Twitter’s previous removal of a documentary that painted PM Modi in an unfavorable light. India also continues to shut down the internet far more than any other democracies, often as a tool to quell political unrest.
India is a complex country, and these recent headlines capture only part of India’s political situation. As companies embrace the opportunities of India and its government’s investment in capital, they must also prepare for the risks of this political uncertainty. For example, companies should consider recent data localization laws when deciding how to structure their networks in India. Global companies should continue to embrace India’s talent and infrastructure, but they should do so with political and data security risks in mind.
For more information or assistance on these issues, please reach out to intel@ks.group.
Forwarded this Exec Brief by a friend? Click below to sign up for our weekly dispatch.
Global Scan
Geopolitics
EU Parliament Calls to Reconsider Ties to Azerbaijan: A major alternative energy supplier to the continent amid Russia sanctions, Baku is now conducting what amounts to ethnic cleansing of Armenians from Nagorno-Karabakh, per a new resolution states.
Ukrainian EU Accession Costs Come into Focus: Joining the union would cost up to €186 billion over the next seven years, as the country would become the primary beneficiary of farming subsidies. Future enlargement will mean that all current EU countries "will have to pay more and receive less."
China’s Foreign Minister Headed to Washington: The visit later this month is part of a bilateral bid to manage increasingly frosty relations and build toward a yet unscheduled meeting between U.S. President Joe Biden and Chinese President Xi Jinping.
Cybersecurity
CISA, NSA Detail Top Ten Network Misconfigurations: The joint advisory aims to reverse the trend of systemic weaknesses in many large organizations, including those with mature cyber postures, and to underscore the importance of secure-by-design principles.
Apple’s Zero-Day Problems Keep Mounting: A newly discovered kernel vulnerability marks the 16th documented in-the-wild zero-day against Apple’s iOS, iPadOS and macOS devices, most attributed to mercenary spyware vendors.
Second Annual Consumer Cyber Readiness Report Released: The report highlights findings from a nationally representative survey of 2,000 US adults, indicating continued progress in consumer cybersecurity practices through the adoption of data and privacy practices, awareness of security tools, and improved posture online.
Strategic and Emerging Tech
European Commission Lists Critical Technologies: Cutting-edge microchips, AI-powered systems, quantum computing and genetic engineering will be put under the microscope to determine whether their exports and imports represent a danger to EU security.
DARPA Aims to Beam Power over Long Distances Wirelessly: Three teams will work to demonstrate laser-based transmission of 10 kilowatts via three aerial relays to their destination 200 kilometers away. The research may have both military and solar-power satellite applications.
Researchers Make Breakthrough in Piezoresistors: A molecular-sized, more efficient version of a widely used electronic sensor opens new possibilities for chemical and biosensors, human-machine interfaces, and health monitoring devices.
Policy/Regulation
ICRC Issues “Rules of Engagement” for Hacktivists: The committee warns that a surge in such activity threatens medical and humanitarian entities, urging hacking collectives to abide by international humanitarian law and avoid targeting civilian infrastructure.
European Telecoms Take Aim at Net Neutrality: BT, Deutsche Telekom, Telefonica, and others asked EU regulators to compel majors like Netflix and Google to pay a "fair" contribution for using their networks.