What is China + 1, What does it mean for India?

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There is a decadal theme playing out in the global arena currently which is generally being termed at China + 1. In lay man’s terms, China’s factory of the World status is increasingly getting challenged. Global purchasers of manufactured products which historically conducted big business with one stop shop China now want to diversify their buying base and have options. This behavior of big purchasers was triggered by Geopolitical shifts but got accelerated by Covid 19 pandemic triggering China + 1 phenomenon to gather pace. Countries like US, Japan, Germany, UK are the big global purchasers and there are increasingly looking towards countries like India, Indonesia, Thailand, Sri-Lanka, Bangladesh, Taiwan to place their big orders for various orders, over and above just buying from China hence the term China + 1. (Having at least 1 more vendor country in addition to China). China + 1 can turn out to be a big opportunity for India to boost its manufacturing capabilities and eventually raise its share of exports in global trade as per experts. The categories where big opportunity presents itself for India are Electronics, Chemicals, Cap Goods, Food Products, Apparels, Furnishings among others. Currently China has has about 15-50% share in the above categories globally, which may eventually get reduced as the phenomenon gathers pace. China current exports stand at about $ trn globally (experts see $70-80bn moving to other countries as China + 1 gathers momentum in next few years).Global buyers keen to de-risk their models, have additional sourcing options and this could mean big opportunity for countries like India. India stands a chance to raise its exports share and Govt schemes like PLI and ease of doing business are a good tailwind to capitalize from this global trend additionally a well-educated, English speaking and technically sound workforce a natural advantage for India. Global Multi-National firms are also keen on setting up manufacturing in India & serve domestic & export markets from local bases as part of China+ 1 trend. Several chemical companies , garment exporters and auto ancillary companies have mentioned in their interactions on ET NOW that they are witnessing increased enquiries from existing and new customers owing to China + one phenomenon.
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