India Stands To Gain More From China Plus One: UBS 2023 – Inventiva

India Stands to Gain More from China Plus One: UBS 2023

A sizable local market, political stability, and macroeconomic stability are other factors that help the nation become a centre for alternative manufacturing.

Sustainable Development Goals (SDGs)

• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation, and Infrastructure
• Goal 12: Responsible Consumption and Production
• Goal 17: Partnerships for the Goals

Introduction

The China Plus One strategy is a business model companies worldwide are adopting to diversify their supply chain by adding a production base in a country other than China.

This strategy emerged as businesses sought to reduce their dependence on China due to rising labour costs, trade tensions, and other risks. According to a recent report by UBS, India stands to gain significantly from this trend. This article explores how India is poised to benefit from the China Plus One strategy.

India’s Potential as a Manufacturing Hub

The China Plus One strategy could drive a manufacturing boom in India. As companies look for alternatives to China, India’s large labour force, improving infrastructure, and recent reforms, like the Production Linked Incentive (PLI) schemes, make it an attractive destination for manufacturers.

As more companies set up manufacturing units in India, employment opportunities will significantly rise. This is expected to help India leverage its demographic dividend with its young and working-age population.

Due to the China Plus One strategy, UBS predicts a surge in FDI into India. This FDI could come from new factories, technology transfers, and strategic partnerships between Indian and foreign firms.

India has introduced several policy reforms to encourage foreign investment, such as the PLI schemes, which incentivize companies to produce certain goods domestically. The government is also working to improve the ease of business in India by simplifying labour laws and reducing red tape.

To facilitate increased manufacturing activity, India has been aggressively developing its infrastructure. The government has launched ambitious projects, such as the Sagarmala and Bharatmala, which aim to enhance port and road connectivity.

Recognizing the need for a skilled workforce, India has been investing in training programs to prepare its workers for the demands of modern manufacturing jobs.

Challenges and Opportunities

While India has significantly improved its regulatory environment, further work is required, especially concerning land acquisition laws, labour market rigidities, and the speed of bureaucratic procedures.

As companies move their production bases to India, exports will likely show a significant uptick. This will help to improve India’s trade balance, which has traditionally been in deficit.

Companies relocating to India may bring with them advanced technologies and production techniques. This could significantly upgrade India’s manufacturing capabilities, allowing it to move up the global value chain.

The UBS report suggests that India stands to gain significantly from the China Plus One strategy, offering a unique opportunity to accelerate its economic development and play a more central role in global supply chains. However, to realize these gains, India must continue its policy reform, infrastructure development, and workforce training efforts.

Conclusion

With its unique combination of a large labour force, improving infrastructure, and increasingly business-friendly policies, India is well-positioned to become a primary beneficiary of the China Plus One strategy. As per UBS, the next decade could see India solidify its position as a global manufacturing hub, helping it to achieve its ambitious economic goals.

The potential is vast, but the challenges are real. The road ahead is paved with opportunities, but it will require concerted efforts from the government, industry stakeholders, and the workforce to fully harness the potential of the China Plus One strategy for India.

SDGs, Targets, and Indicators

1. SDG 8: Decent Work and Economic Growth

   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.
   • Indicator: Increase in manufacturing activity and employment opportunities in India.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.2: Promote inclusive and sustainable industrialization and increase the share of employment in manufacturing.
   • Indicator: Surge in FDI into India for new factories, technology transfers, and strategic partnerships.
   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable.
   • Indicator: Development of infrastructure projects like Sagarmala and Bharatmala to enhance port and road connectivity.

3. SDG 12: Responsible Consumption and Production

   • Target 12.2: Achieve sustainable management and efficient use of natural resources.
   • Indicator: Reduction in dependence on Chinese imports and diversification of supply chains.

Table: SDGs, Targets, and Indicators

Analysis:

The article discusses how India stands to gain from the China Plus One strategy, which aims to diversify supply chains and reduce reliance on Chinese imports. Based on the content of the article, the following analysis can be made:

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The issues highlighted in the article are connected to the following SDGs:

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 12: Responsible Consumption and Production

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s content, the following specific targets can be identified:

• Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.
• Target 9.2: Promote inclusive and sustainable industrialization and increase the share of employment in manufacturing.
• Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable.
• Target 12.2: Achieve sustainable management and efficient use of natural resources.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, there are indicators mentioned or implied in the article that can be used to measure progress towards the identified targets:

• Increase in manufacturing activity and employment opportunities in India as an indicator for Target 8.2.
• Surge in FDI into India for new factories, technology transfers, and strategic partnerships as an indicator for Target 9.2.
• Development of infrastructure projects like Sagarmala and Bharatmala to enhance port and road connectivity as an indicator for Target 9.4.
• Reduction in dependence on Chinese imports and diversification of supply chains as an indicator for Target 12.2.

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: inventiva.co.in

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