India's 'Goldilocks' Year Curdles on Rupee, China — SkimNews
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- India's rupee was Asia's worst-performing currency in 2025 and has fallen another 6% in 2026, with RBI Governor Sanjay Malhotra spending the year defending it from deeper declines.
- Indian manufacturing still accounts for only 17% of GDP, well short of the 25% share Modi set as a target when launching 'Make in India' in 2014.
- Chinese inputs supply up to 85% of machinery and components in many of India's fastest-growing industries, driving a bilateral trade deficit of $112.1 billion in fiscal 2025-26.
- India's lithium-ion battery imports from China have more than doubled since 2021-22, reaching $3.9 billion in the fiscal year ending March 2026, while China also supplies 85-90% of India's rare-earth minerals and magnets.
- Domestically made capital goods in India run about 40% more expensive than Chinese imports of equal or higher quality — a gap the source notes tariffs cannot close.
- The BSE Sensex is down more than 14% year-to-date as oil above $100 per barrel stresses an economy that imports over 90% of its energy needs, with most crude and LNG transiting the Strait of Hormuz.
- Indian remittances hit a record $138 billion last year, but economists increasingly view the brain drain as a drag on domestic productivity rather than proof of global reach.
Why it matters: For multinationals betting on India as a China alternative, the gap between Modi's 'Make in India' rhetoric and on-the-ground reality — factories that run on Chinese components, a manufacturing share stuck at 17% of GDP, and a 14% Sensex slide — limits how much supply-chain diversification India can actually deliver.
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