'China Plus One' Strategy: A Boon for Tamil Nadu's Investment Landscape

'China plus one' is offering India, particularly Tamil Nadu, a chance to enhance its appeal for foreign direct investments. However, India struggles to match the FDI attraction levels of China, Taiwan, and Vietnam due to lack of global value chain integration, affecting exports and labour-intensive sectors adversely.

In the evolving global economic landscape, the 'China plus one' strategy is becoming a potential turning point for India, with Tamil Nadu striving to leverage its competitive edge in attracting foreign direct investment (FDI). This insight was highlighted by Arvind Subramanian, former chief economic adviser, during an event organized by the Centre for Social and Economic Progress.

Subramanian pointed out that India has lagged behind countries like China, Taiwan, and Vietnam in attracting FDI, a shortcoming that has hindered domestic businesses from integrating into the global value chain. This lack of integration, he noted, has detrimental effects on India's export capabilities and labour-intensive sectors.

The 'China plus one' strategy involves multinational companies diversifying their operations beyond China, offering Indian states such as Tamil Nadu an opportunity to boost their investment profiles. Supporting this viewpoint, former Planning Commission deputy chairman Montek Singh Ahluwalia emphasized the risk of stigmatizing serious businessmen in the current economic climate. He indicated Tamil Nadu's substantial success in attracting over Rs 9 lakh crore in investments and generating 31 lakh jobs in recent years.

(With inputs from agencies.)