India's Struggle in the China Plus One Strategy: A Missed Opportunity?

NITI Aayog's report highlights India's challenges in capitalizing on the China Plus One strategy amid geopolitical shifts in 2024. While countries like Vietnam and Thailand excel, India grapples with regulatory and cost issues. Still, it remains an attractive manufacturing hub for multinational corporations eyeing diversification.

India is facing significant challenges in leveraging the China Plus One strategy as detailed in a report by NITI Aayog. Amid the evolving global trade landscape of 2024, geopolitical developments have played a crucial role, yet India struggles to position itself as a viable alternative to China.

The report indicates that Vietnam, Thailand, Cambodia, and Malaysia are leading beneficiaries, successfully attracting businesses diversifying their manufacturing bases. Factors contributing to these countries' success include lower labor costs, simplified tax systems, and active trade policies, including Free Trade Agreements (FTAs).

Despite these challenges, the report notes India's potential as a manufacturing hub, especially in high-tech industries, due to ongoing geopolitical shifts. However, India's regulatory issues and high costs remain barriers, and the country must guard against potential risks such as China's market dumping. Enhanced ease of doing business and stronger trade agreements are crucial for India in this context.

(With inputs from agencies.)