India’s Growth with ‘China Plus One’ Strategy
Insights from Chief Economic Adviser V Anantha Nageswaran
Chief Economic Adviser V Anantha Nageswaran has highlighted India’s potential to benefit from the ‘China Plus One’ strategy. This strategy involves companies diversifying their investments to countries other than China.
In a virtual interaction following the presentation of the Economic Survey 2023-24, Nageswaran explained, “China Plus One is definitely an important component of India’s growth as a global manufacturing player.” He added that to become a viable alternative, India needs to develop ecosystems similar to those in China.
Since the COVID-19 pandemic in 2020, supply chain disruptions, geopolitical tensions, and protectionism have led many global manufacturing companies to diversify their operations. India, with its political stability, large market, dynamic workforce, and rising income levels, is seen as an attractive destination for setting up manufacturing bases.
India’s economy has shown robust growth, with an 8.2% increase in 2023-24, 7.2% in 2022-23, and 8.7% in 2021-22. Nageswaran noted, “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.”
The Indian government is opening several sectors to foreign investment, making the country even more attractive to global investors. Nageswaran also mentioned that leveraging the ‘China Plus One’ strategy would depend on how India engages with China itself.
Companies like Foxconn and Apple, along with other electronics, aerospace, and medical device companies, are expanding their operations in India, supported by government incentives and a push on electronics manufacturing.
Doubts Revealed
Chief Economic Adviser -: The Chief Economic Adviser is a top government official who gives advice on economic policies and strategies to help the country grow.
V Anantha Nageswaran -: V Anantha Nageswaran is the person who currently holds the position of Chief Economic Adviser in India.
‘China Plus One’ strategy -: The ‘China Plus One’ strategy is when companies invest in other countries besides China to reduce their risk of relying too much on one country.
ecosystems -: In this context, ecosystems refer to the business environment and infrastructure needed to support manufacturing and other industries.
Foxconn -: Foxconn is a big company that makes electronics for many brands, including Apple. They are expanding their factories in India.
Apple -: Apple is a famous company that makes iPhones, iPads, and other electronic devices. They are increasing their production in India.
government incentives -: Government incentives are benefits like tax breaks or financial support given by the government to encourage companies to invest and grow in the country.