For much of the past decade, “China+1” had a fairly straightforward meaning: keep China at the centre of the supply chain, but build a second manufacturing base elsewhere as insurance.
That thinking is changing.
In 2026, India is increasingly being evaluated on its own merits, not simply as a fallback to China or as a lower-cost offshore destination. For a growing number of multinationals, the opportunity is to build a strategic operating base combining manufacturing, engineering, technology, talent and business services.
The underlying shift predates the latest round of tariff changes. Geopolitical risk, supply-chain resilience and the concentration of electronics manufacturing in China were already pushing companies to diversify.
But higher US tariffs, Section 301 duties and continued scrutiny of Chinese-origin electronics have made the economics and strategic case harder to ignore.
The result is a more mature version of China+1. The question for many companies is no longer simply, “Where can we put some production outside China?” It is becoming, “Where should our next major operating base be?”
India is increasingly part of that conversation.
If one company illustrates how quickly India's position is changing, it is Apple.
India's share of global iPhone production is expected to reach roughly 25 to 30%, compared with less than 10% only a few years ago. More significant than the headline production number, however, is the development of the surrounding ecosystem.
Apple now has five major assembly facilities in India, operated by Tata Group and Foxconn, alongside a growing network of around 45 local component suppliers.
That is a different proposition from simply moving final assembly.
India's manufacturing opportunity is also broadening beyond mobile phones.The Production-Linked Incentive (PLI) programme began with a strong focus on electronics but has since expanded across pharmaceuticals, automotive components, textiles, specialty steel and other strategic industries.
For investors, the important point is not simply the availability of incentives. It is the gradual emergence of a more complete manufacturing ecosystem, including suppliers, engineering talent, domestic demand and industrial infrastructure, around selected sectors.
That is increasingly making India a serious option alongside Vietnam and Mexico, depending on the product, target market and supply-chain requirements.
India is not attempting to replicate Taiwan's semiconductor industry overnight. The more immediate opportunity is further downstream.
As of mid-2026, 13 semiconductor projects across seven states had been approved under the India Semiconductor Mission, representing cumulative investment of more than ₹1.6 lakh crore, or approximately $19 billion.
For multinational companies, the near-term opportunity is likely to be concentrated in areas such as semiconductor assembly, testing and packaging, together with associated engineering, equipment and supply-chain activities.
That is a more realistic starting point than expecting India to become a leading-edge chip fabrication centre in the short term.
The services story has evolved in parallel.
For years, India's technology proposition was largely framed around cost arbitrage: move IT support, back-office processing and routine business processes offshore.
That model is no longer an adequate description of India's role.
Global Capability Centres (GCCs) are increasingly being used by multinationals as core operating platforms for technology, finance, engineering, analytics and increasingly strategic business functions.
According to the 2026 Nasscom-Zinnov India GCC Landscape report, India now hosts 2,117 GCCs employing approximately 2.36 million professionals and generating around $98.4 billion in revenue.
The implication for companies entering India is significant. The question is no longer only whether India can provide lower-cost talent. It is whether India can provide the specialist talent and institutional capability required to operate critical functions globally.
In many sectors, the answer is increasingly yes.
French companies provide a useful example of how European businesses are building deeper positions in India across technology, manufacturing, automotive, aerospace and defence.
At the France-India summit in Nice in June 2026, Commerce Minister Piyush Goyal encouraged French companies to invest, design and manufacture in India. The two countries are targeting a doubling of bilateral trade from approximately $15.8 billion over the next five years.
Around 1,000 French companies currently operate in India, supported by cumulative French FDI of nearly $12.25 billion since 2000.
The interesting part is the breadth of this presence.
Capgemini has approximately 175,000 employees in India, representing more than half of its global offshore workforce, with operations spanning AI, cloud, engineering and enterprise platform integration.
Financial services groups are following a similar model. Société Générale has established substantial technology operations in Bengaluru and Chennai, alongside a newer presence in GIFT City. BNP Paribas employs more than 14,000 professionals across its technology and operational hubs in India.
This is no longer simply an outsourcing model. These operations increasingly sit inside the core global operating architecture of the companies involved.
The automotive sector provides another good example.
Valeo operates a major software R&D centre in Chennai focused on EV architecture, driver-assistance systems and other next-generation vehicle technologies.
The Renault-Nissan Technology Business Centre employs more than 10,000 engineers working on core vehicle platforms.
For automotive companies, India's value proposition is therefore not limited to manufacturing cost. Engineering capability and access to a large domestic automotive market are becoming equally important parts of the equation.
Schneider Electric treats India as one of its four major global hubs and operates 31 factories in the country, including a World Economic Forum-designated Lighthouse Factory in Hyderabad.
Alstom manufactures electric locomotives and metro systems in Bihar and Andhra Pradesh, serving both the Indian market and export markets.
These examples point to a broader trend: companies are increasingly using India not just to manufacture for India, but as part of their global production footprint.
Aerospace and defence may prove to be an even more strategic area.
Safran employs more than 3,500 people across 18 sites in India and is developing a major engine Maintenance, Repair and Overhaul (MRO) facility in Hyderabad.
Airbus already sources more than €1 billion of components annually from India and, together with Tata, is assembling C295 military transport aircraft domestically.
For European industrial companies, these developments demonstrate that India is moving beyond the traditional low-cost manufacturing proposition and into more technically demanding parts of the value chain.
The India opportunity in 2026 is broader than a manufacturing relocation story.
Companies are increasingly looking at India as a platform that can combine domestic market access with manufacturing, engineering, technology, R&D and global business services. That makes the market relevant not only for supply-chain diversification, but also for broader decisions around where future capabilities should be built.
The opportunity is not without execution challenges. Supplier development, infrastructure, talent availability, regulatory requirements and state-level differences all need to be assessed carefully. Market entry therefore requires a location and operating model tailored to the company's sector and objectives.
But the direction of travel is clear. India is moving up the value chain and becoming a more important part of how multinational companies think about their global operations.
For companies considering India today, the question is no longer simply whether India can support their business. It is which parts of their global value chain should be built and scaled there.