"Global firms choose States, not India." Discuss the role of sub-national industrial ecosystems in India's China+1 opportunity, with reference to Tamil Nadu and Karnataka.

Under China+1, global firms keep production in China but add capacity elsewhere to reduce supply-chain risk. India is a leading beneficiary, especially in mobile phones [1]. Yet no investor builds a factory in "India". It picks a State, and with it that State's land, power, approvals, workers and suppliers. Sub-national ecosystems are therefore where the competition is really decided.

Why States decide outcomes

• Central schemes only set the floor. PLI rewards incremental sales [2], and ECMS targets components [1]. Delivery depends on State land banks, single-window clearances, logistics and skilled labour.
• Competitive federalism means States compete on this whole bundle, not merely on tax breaks.

Tamil Nadu: depth through clustering

• The Sriperumbudur belt near Chennai is an established hub. The Centre has approved EMC 2.0 clusters at Manallur and Pillaipakkam (Sriperumbudur taluk) [3].
• Five of the seven projects in ECMS's first tranche went to Tamil Nadu, covering PCBs, camera modules and laminates [4]. Component investment follows existing clusters.

Karnataka: land, talent and anchor firms

• Foxconn secured about 300 acres at the ITIR, Doddaballapura–Devanahalli, for phone assembly [5]. Kolar hosts the Wistron-built iPhone unit, and smartphones are a key district export [6].
• An EMC at Hubballi-Dharwad spreads electronics manufacturing beyond Bengaluru [7]. Bengaluru's engineering talent supplies design depth.

Limits of the State-led model

• Concentration: PLI-LSEM gains went mainly to Apple's contract manufacturers [8]. Relying on a few anchor firms makes clusters fragile.
• Regional divergence: capital follows existing hubs, so leading States pull further ahead. ECMS approvals do now span 11 States [9].
• Shallow value addition: output is still mostly assembly. ECMS exists because components are still largely imported [4].

Tamil Nadu and Karnataka show that China+1 capital goes where ecosystems are ready, not just where incentives are announced. Lagging States should copy what can be copied: plug-and-play parks, time-bound approvals and skilling. The Centre should link incentives to domestic value addition and use EMC and ECMS to start new clusters. This cooperative-competitive federalism, in the spirit of SDG 9, can make all of India the preferred China+1 destination, not just two States.