China+1 Shift Opens Path for India-ASEAN Manufacturing Partnership
New Delhi, October 30: The changing face of global industry under the China+1 strategy is creating large openings for India and ASEAN, the group of Southeast Asian nations. Investment competition between the two could evolve into a joint production model that benefits both.
Together, they could present themselves as dependable alternatives to China for global businesses. They could also become among the most significant manufacturing hubs in the Indo-Pacific economy.
The central argument of a recent article is that the China+1 strategy should be shaped into a shared India-ASEAN production strategy. Doing so would turn scattered national ambitions into a coherent regional plan.
According to a regional economic study, ASEAN's links with global production networks are comparatively strong. India's place in global value chains, however, still has considerable room to grow.
The same research underlines why cross-border investment and the pooling of manufacturing strengths across regional boundaries matter.
Under the regional production network approach, companies earn stronger economic returns when they combine the advantages of several locations. India brings a large home market, technological strengths, and an extensive industrial and labour base. ASEAN brings supplier networks, ports, industrial zones, export know-how, and reach into East Asian and Pacific markets.
If each side works alone, there is a risk of overlapping investments and head-to-head competition in similar products. Working together allows components to be made in one country, processed in another, and assembled wherever it is most efficient. The resulting products can then be sold through regional trade networks. This is what separates simply luring investment from building shared competitive strength.
The two sides need a common cross-border supply chain map. Such a map should spell out priority sectors, supplier shortfalls, technology requirements, and the most competitive production stages in each country. Electronics, semiconductors, electric vehicle batteries, pharmaceuticals, and industrial machinery have been identified as suitable early sectors.
A trade agreement between the two sides, the article suggests, should aim to ease trade in intermediate goods and components. Investment cooperation also needs to move past the model in which individual countries compete separately for investors.
India must reinforce its manufacturing competitiveness, bring more predictability to regulatory policy, create openings for technology partnerships, and draw on its domestic market to support mass production. It could also grow into a centre for design, engineering, industrial software, and selected component manufacturing.
ASEAN, meanwhile, must strengthen connectivity among its member states, bring greater uniformity to standards, and link its industrial zones and ports with India's supplier network.
Indonesia can contribute to critical minerals, battery materials, and downstream industrial growth. Malaysia can strengthen its semiconductor and electronics sectors, Thailand can play a significant role in automobile manufacturing, and Vietnam can play a vital role in electronics manufacturing and export networks.