India is the top destination being explored by multinational corporations as an alternative to China, according to a survey of 100 CEOs who primarily represent foreign B2B-focused firms.
The CEOs also consider Vietnam, Thailand and their own home countries as potential options.
Amid China’s increasing geopolitical assertiveness, questionable trade and business practices, and rising labour costs, 88% of the CEOs who participated in research firm IMA India’s 2023 Global Operations Benchmarking Survey opted for India as their primary alternative to China. The survey was run among companies with a presence in India.
“In the last five years foreign MNCs have increased their on-ground presence in India, partly as a result of diversification away from China. In particular, the IT & ITES companies are ramping up the share of their global workforce that is based in India,” said Suraj Saigal, Research Director, IMA India.
According to a report based on the survey, nearly 70% of the firms saw substantial changes to their business strategies and on-ground operations in China in the past three years. The industrial sector shows a more prominent pull-back compared to the services sector. Among those implementing changes 56% have decreased their sourcing from China and 41% reduced investments.
While a minority completely exited, 6% of the surveyed companies have scaled back their market engagement.
The research also examined how businesses are perceiving and capitalising on the opportunities presented by India, taking into account the recent shifts in commercial and geopolitical strategies.
From FY18 to FY23, India's estimated global share in workforce has increased from 22.4% to 24.9% in mean percentage terms, while revenue share has risen from 14.8% to 15.8%. These figures demonstrate incremental growth for India on the global stage during this period.
As per the study, a larger proportion of manufacturing companies, in comparison to service-based companies, has chosen India, Vietnam or Thailand as their alternative to China.
Read more at: https://economictimes.indiatimes.com/epaper/delhicapital/2023/may/28/sunet-front/india-tops-china-alternatives-list/articleshow/100557964.cms