India is set to benefit significantly from the China-plus-one strategy, with India’s exports projected to rise from $431 billion in 2023 to $835 billion by 2030. Nomura highlights India’s large domestic market, attracting firms in electronics, apparel, and machinery, boosting its global trade share to 2.8%.

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India is emerging as a major beneficiary of the China-plus-one strategy, with India’s exports projected to soar to $835 billion by 2030 from $431 billion in 2023, according to a report by Nomura. The strategy, which aims to diversify supply chains away from China, is expected to unlock new growth opportunities for Asian economies, with India and Vietnam gaining the most.

Nomura’s report highlights that India’s large domestic market is a key factor attracting firms seeking supply chain alternatives to China. Companies in sectors such as electronics, apparel and toys, automobile and components, capital goods, and semiconductor manufacturing are increasingly looking to invest in India. The report predicts an annual export growth rate of 10% over the period.

Electronics is expected to be the fastest-growing sector, with exports projected to grow at a compound annual growth rate of 24%, nearly tripling in value to $83 billion by 2030. Machinery exports are also set to more than double, reaching $61 billion by 2030 from $28 billion in 2023.

Nomura notes that despite low production-linked incentive (PLI) disbursements, India’s potential for global value chain integration remains high. Factors such as market size, rapid growth, lower labor costs, and political and economic stability make India an attractive destination for investment in consumer goods production. This is expected to cater to both domestic demand and export markets, with India’s share of global trade anticipated to rise to 2.8% by 2030.

The competitiveness of Indian production is likely to accelerate exports and improve the country’s trade balance and current account, suggesting a structural case for currency appreciation. Nomura’s survey of 130 enterprises indicates growing interest in India and Vietnam, particularly from US-based companies in the electronics sector. Japan and Korea are also investing in India’s auto, consumer durable, and electronics sectors to leverage the growing domestic demand and use India as a manufacturing base.

Strengthening India’s manufacturing sector and its growing export share is expected to support 12-17% earnings growth for the corporate sector over the medium term.