India's global appeal: CEOs opt for India as top alternative to China
India China
As China's geopolitical assertiveness and questionable trade practices raise concerns, multinational corporations are seeking alternatives. According to a recent survey by research firm IMA India, one country stands out as the top destination for these corporations: India.
The survey, conducted among 100 CEOs representing foreign B2B-focused firms, revealed that a staggering 88 percentof the CEOs see India as their primary alternative to China. With India's growing on-ground presence, particularly in the IT and ITES sectors, companies are diversifying away from China and exploring new opportunities in the Indian market.
Over the past three years, nearly 70 percentof the surveyed firms have made substantial changes to their business strategies and operations in China. While some have scaled back their market engagement or reduced investments, a majority have decreased their sourcing from China. These changes reflect a shift in supply chain dynamics and a growing interest in derisking strategies.
The survey also highlighted India's increasing significance on the global stage. From fiscal year 2018 to 2023, India's estimated global share in workforce has risen from 22.4 percentto 24.9 percentin mean percentage terms, demonstrating incremental growth. Similarly, India's revenue share has increased from 14.8 percentto 15.8 percent, further solidifying its presence as a key player in the global economy.
Manufacturing companies, in particular, have shown a strong inclination towards India, Vietnam, and Thailand as alternative options to China. This trend underscores the growing recognition of the need to de-risk supply chains and explore new manufacturing hubs. However, it is important to note that the survey also revealed challenges related to infrastructure, regulation, and skill development that businesses face when considering India as an alternative.