Things have started on a good note, but experts say roadblocks like infrastructure, red tape, a complex tax system and skilled labour remain
Global manufacturers are betting big on India. The current global supply chain is heavily dependent on China’s manufacturing capacity. But things are changing now, and many manufacturers around the world are looking for ‘China Plus One’. This term, which came into being back in 2013, is a business plan to avoid investing only in China and expand the business into other countries, and India seems to be the current favourable market for many. Over the past decade, countries like Vietnam, Thailand, Malaysia had emerged as the hot alternatives to China for the United States. Recent announcements, starting with Apple and more recently First Solar, suggest that India is the current favourite. Is it?
Before the Covid-19 pandemic, China remained an important supplier to most countries. However, with the onset of the pandemic, the US-China trade war, and rising labour costs, manufacturers are looking for substitutes to avoid experiencing shortages due to supply chain disruptions in China.
And last fortnight, coinciding with Prime Minister Narendra Modi’s US visit, chip-maker Micron Technology sealed a deal to set up a semiconductor facility in Gujarat. Reports also suggest that South Korean tech giants Samsung and LG Electronics have moved their production operations away from China due to growing uncertainties and are looking very closely at the world's fifth-largest economy. Also Read: How China's growing supply chain constraints are giving Apple's India play a big boost
Also Read: India's potential to dominate smartphone and semiconductor manufacturing for the world