India big gainer from China plus one strategy! ‘Exports to almost double to $835 billion’; here’s why – Times of India

India and Vietnam are benefiting the most from the China plus one strategy, which is anticipated to create new growth opportunities for Asian economies, as per a report by Nomura released on Tuesday. The report predicts that India’s exports will surge to $835 billion by 2030 from $431 billion in 2023, driven by its large domestic market that attracts firms seeking supply chain alternatives to China.
ET quoted Nomura as saying, “Firms in electronics, apparel & toys, automobile & components, capital goods and semiconductor manufacturing are looking to invest in India. Given India’s large domestic consumer market, firms setting up shop in India are attracted also because of the captive domestic market.”
The report forecasts a 10% annual growth in exports over the period, with electronics becoming the fastest-growing sector, achieving a compound annual growth rate of 24% and nearly tripling in value to $83 billion by 2030. Machinery exports are expected to more than double to $61 billion by 2030 from $28 billion in 2023.

Nomura believes that “the low production linked incentive (PLI) disbursements are not a good reflection of India’s potential on global value chain integration. Its large market size, faster growth, lower labour cost and political and economic stability make it an attractive investment destination for consumer goods production to both cater to domestic demand and also for exports.”
The report anticipates India’s share of global trade to increase to 2.8% by 2030.
The competitiveness of Indian production is expected to accelerate exports and improve the country’s trade balance and current account, according to Nomura. “This points to a structural case for currency appreciation,” the report stated.
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Nomura’s survey of 130 enterprises also revealed a growing interest in India and Vietnam. “A majority of the investment into India are from US-based companies, especially in the electronics sector. Japan and Korea are also investing in India’s auto, consumer durable and electronics sectors to take advantage of the growing domestic demand and to use it as a manufacturing base,” the report said.
Nomura added that the strengthening of India’s manufacturing sector and its increasing share in exports will help the corporate sector sustain 12-17% earnings growth over the medium term.