New Delhi [India], July 22 : India can take advantage of the 'China Plus One' strategy, but to realize it would require some of the ecosystems that companies have created in China, said Chief Economic Adviser V Anantha Nageswaran.
The China Plus One strategy typically involves companies diversifying their investments to countries other than China.
"China Plus One is definitely an important component of India's growth as a global manufacturing player," CEA Nageswaran toldin a virtual interaction following the presentation of the Economic Survey 2023-24.
"Many countries are looking at India, but to become China Plus One, we also need some of the ecosystems that these companies have created in China," the Chief Economic Adviser further explained.
Faced with supply chain disruptions, particularly since the COVID-19 pandemic hit in 2020, along with a subsequent flare-up of geopolitical tensions and protectionism by various countries, including European nations and the US, many leading global manufacturing companies are diversifying their operations across regions.
For companies in such situations, this means exploring emerging global supply chain regions for diversification. India, given its political stability, huge market opportunity, dynamic workforce, and steady rise in income levels is eyed as one of the best places to set up manufacturing bases. The country remains the fastest-growing major economy and is poised to maintain its growth trajectory. India's economy grew by 8.2 per cent in 2023-24, 7.2 per cent in 2022-23, and 8.7 per cent in 2021-22.
"If you want to attract a big manufacturer to India, that manufacturer also requires some of the ecosystems they have created in China to follow them into India," Nageswaran added.
India has virtually what it takes to attract global investments. The government is increasingly opening several sectors, including key ones, to foreign investment, which was not the case earlier.
Nageswaran also asserted that taking advantage of the emerging attractiveness of the China Plus One strategy would depend on how "we engage with China itself."
Companies like Foxconn and Apple, along with many well-known electronics, aerospace, and medical device companies, are scaling up India operations, backed by government incentives and the latest push on electronics manufacturing.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor