An article recently published in Humanities & Social Sciences Communications comprehensively explored the environmental and economic effects of India’s emergence as a global manufacturing hub. The researchers analyzed the impact of industrial relocation from China to India, particularly regarding carbon emissions and global climate change efforts. Their goal was to measure the effects of this shift and provide insights into its influence on greenhouse gas emissions and long-term climate strategies.
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Shift in Global Manufacturing and its Implications
The global manufacturing sector has experienced significant changes due to economic dynamics, labor costs, and technological advancements. Historically, China has dominated this landscape. However, rising labor costs, geopolitical tensions, and supply chain risks have led companies to reconsider their production strategies.
As a result, India has emerged as a good alternative, supported by its workforce, growing market, and favorable government initiatives like the “Make in India” initiative. This transition presents economic opportunities and significant environmental challenges, primarily regarding carbon emissions, as manufacturing processes are often carbon-intensive.
Exploring the Impact of Shifting from China to India
In this paper, the authors presented a framework model that integrates economic and environmental factors to assess the effects of industrial relocation. They applied an Inter-Country Input-Output (ICIO) model and counterfactual analysis to evaluate potential changes in carbon emissions and economic growth resulting from shifting production lines.
To achieve this, the study categorized scenarios based on the timeline of industrial relocation. The ultra-long-term (ULT) scenario assumes minimal capacity constraints, while the medium and long-term (MLT) scenario accounts for capacity limits. The MLT scenario was further divided into benchmark (BM), upper limit (UL), and lower limit (LL) cases to explore different outcomes based on India’s ability to absorb industrial relocation.
Environmental input-output analysis was employed to quantify the carbon footprint of specific cases, like the relocation of iPhone production from China to India. This approach allowed researchers to track emissions across the supply chain and assess the impact of such a shift. Additionally, extensive literature on industrial relocation, environmental effects, and economic growth was incorporated to strengthen the analysis.
Key Findings and Insights of Manufacturing Shifting
The outcomes showed that relocating industrial activities from China to India could significantly increase global carbon emissions. In the ultra-long term, emissions could rise by approximately 855.5 million metric tons of carbon dioxide (CO2), surpassing the reductions achieved by major economies like the G7 (United States, Canada, Germany, France, Italy, the United Kingdom, Japan) and the European Union (EU) between 2009 and 2021. In the medium and long term, emissions could increase by 396.5 million metric tons, accounting for nearly 39.4% of the emissions reduced by all G7 countries during the same period.
Key sectors driving this increase include computers, electrical equipment, basic metals, and automotive manufacturing, contributing around 79.8% of the emissions from industrial relocation. These industries generate significant carbon emissions primarily through the trade of intermediate products, highlighting the critical importance of optimizing India's existing industrial structure to mitigate additional emissions.
The study estimates that completely relocating iPhone production to India could result in a 107.5% increase in carbon footprint, effectively doubling the emissions linked to its production. This result highlights the broader environmental challenges of India's transition to a manufacturing hub. The relocation process could also reduce global gross domestic product (GDP), affecting China, India, and other regions.
The authors emphasized that India's industrial transition could offset years of progress in global emissions reduction, suggesting an urgent need for policies that balance economic growth with environmental sustainability. Advancements in pollution reduction technologies are essential to align India's manufacturing expansion with global climate goals.
Practical Applications for Sustainable Development
This research has significant implications for policymakers, industry leaders, and environmental groups. It highlights the necessity for India to balance industrial growth with environmental responsibility. Relocating factories affects carbon emissions, making strategic planning essential to promote cleaner production and sustainable practices.
The study suggests delaying the relocation of high-emission industries until cleaner technologies are available, which could help reduce pollution. Additionally, adopting advanced technology can assist developing countries in lowering emissions and aligning with cleaner industrial processes used in advanced economies.
Investing in renewable energy and improving efficiency are key to India’s growth while minimizing its environmental impact. The authors also emphasized the need for international trade policies that promote sustainable industrial practices through global cooperation. A balanced approach is crucial for advancing economic progress without increasing pollution.
Conclusion and Future Directions
In summary, the shift of industries from China to India presents economic opportunities and environmental challenges, making sustainable practices crucial. The researchers highlighted the need to balance expansion with environmental responsibility and suggested delaying the relocation of high-emission industries until cleaner technologies become available.
Future work should focus on integrating clean energy into India’s manufacturing sector to evaluate this transition's environmental impact better. By prioritizing sustainability, India can reduce emissions while supporting industrial growth, contributing to global climate goals.
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Source:
Zhang, X., Li, Y., Zhu, K. et al. The environmental and economic impacts of India’s emergence as the global manufacturing hub. Humanit Soc Sci Commun 12, 189 (2025). DOI: 10.1057/s41599-024-04356-9, https://www.nature.com/articles/s41599-024-04356-9