India has seen limited success from China Plus One strategy, says NITI Aayog
This story was originally published at 20:32 IST on 4 December 2024
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NEW DELHI – India has had "limited success" in trying to benefit from the 'China Plus One' strategy adopted by multinational corporations, a report by the NITI Aayog said Wednesday. Countries such as Vietnam, Thailand, Cambodia, and Malaysia have gained more from companies seeking alternatives to Chinese manufacturing, it said.
The US has tightened export controls and imposed higher tariffs on Chinese goods to limit China’s technological progress, the NITI Aayog said in its report, adding that this has led to a fragmentation of global supply chains. Multinational corporations are looking to move manufacturing away from China, and this "trade war" has pushed up costs and increased production delays, affecting global markets, the 'Trade Watch Quarterly' report said.
"For India, this situation presents both challenges and opportunities," according to the report. While India has to navigate disruptions in global supply chains and be wary of China dumping products, it is also seen as an attractive destination for companies looking to move manufacturing out of China, according to the report. "This shift offers India a chance to enhance its domestic manufacturing capabilities, particularly in high-tech industries," the NITI Aayog said in the report.
Countries which have been bigger beneficiaries of the 'China Plus One' strategy of multinational companies have been helped by factors such as cheaper labour, simplified tax laws, lower tariffs, and pro-activeness in signing free trade agreements, the NITI Aayog report noted. End
Reported by Shubham Rana
Edited by Rajeev Pai
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