India emerges as key alternative in China-Plus-One manufacturing strategy

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India emerges as key alternative in China-Plus-One manufacturing strategy

India emerges as key alternative in China-Plus-One manufacturing strategy

Industry News
Jan 17,24

According to a survey of Chief Executive Officers (CEOs), nearly 53% anticipate that India will emerge as an alternative manufacturing destination to China.

India emerges as key alternative in China-Plus-One manufacturing strategy

The concept of "China-plus-one" has gained momentum recently as companies seek to reduce their reliance on Beijing for manufacturing and software services. India, with its sizable and youthful population, coupled with expanding infrastructure, is perceived as a beneficiary of this transition. According to a survey of Chief Executive Officers (CEOs) by Moneycontrol, nearly 53% anticipate that India will emerge as an alternative manufacturing destination to China.

Among the CEOs surveyed, 24.5% expressed a strong belief that India is well-positioned to be a definite alternative to Beijing, while approximately 21% are skeptical, considering India not ready to assume this role.

In October 2023, V Anantha Nageswaran, India's Chief Economic Advisor, emphasized in an article that with the West increasingly turning to India to diversify its supply chains, New Delhi should intensify efforts to attract foreign companies. This can be achieved by leveraging India's advantages, such as a large domestic market, macroeconomic stability, and consistent policies.

The China-plus-one strategy is predominantly embraced by Western nations, urging their companies to reduce supply-chain dependency on China by sourcing parts from diversified countries. Major global players, including Tesla, are placing bets on India evolving into a significant manufacturing hub. These companies are actively exploring opportunities to establish factories in India, aiming to capitalize on the country's expanding domestic market.

A notable example is Apple Inc., whose new facility in Tamil Nadu commenced the production of the latest iPhone 15 in September 2023. The phones manufactured in India are not only consumed locally but also exported. Additionally, Vestas, the world's largest wind turbine manufacturer based in Denmark, is set to open two new plants in India, further underlining the country's appeal as a strategic manufacturing destination.

Source: Money Control