Summary :
India and Vietnam are emerging as key beneficiaries of the China plus one strategy, with Nomura predicting significant growth opportunities for Asian economies. According to a Nomura report, India's exports are projected to soar from $431 billion in 2023 to $835 billion by 2030. This growth is driven by India's vast domestic market, which is attracting companies looking to diversify their supply chains away from China.
According to Nomura, India and Vietnam are the primary beneficiaries of the China plus one strategy, which is anticipated to create new growth opportunities for Asian economies.
In a report on Tuesday, Nomura stated that India's exports are expected to surge from $431 billion in 2023 to $835 billion by 2030, driven by its large domestic market attracting firms seeking supply chain alternatives to China.
"Companies in electronics, apparel and toys, automobiles and components, capital goods, and semiconductor manufacturing are looking to invest in India," Nomura stated. "India's large domestic consumer market is also a major attraction for these firms," Nomura added, predicting a 10% annual growth over the period.
The global research firm expects electronics to become the fastest-growing sector, with exports experiencing a compound annual growth rate of 24%, nearly tripling to $83 billion by 2030. Machinery exports are projected to more than double, rising from $28 billion in 2023 to $61 billion by 2030.
"Low production linked incentive (PLI) disbursements do not adequately reflect India's potential in global value chain integration," Nomura stated. "India's large market size, rapid growth, lower labor costs, and political and economic stability make it an attractive destination for consumer goods production to meet both domestic demand and export needs." Nomura expects India's share of global trade to rise to 2.8% by 2030.
Nomura highlighted that the competitiveness of Indian production is likely to boost exports and improve the country's trade balance and current account. "This indicates a structural case for currency appreciation," the firm noted.
Nomura noted that the majority of investments in India come from US-based companies, particularly in the electronics sector. Japan and Korea are also investing in India's auto, consumer durable, and electronics sectors to capitalize on the growing domestic demand and to use India as a manufacturing base. The strengthening of India's manufacturing sector and its increasing share in exports are expected to help the corporate sector sustain 12-17% earnings growth over the medium term, the firm added.
About RR Finance :
An integrated financial services group, offering a wide range of financial products and services to corporates, institutions, high-net worth individuals and retail investors.
Explore a wide range of investment opportunities with RR Finance:
Disclaimer :The recommendations, suggestions, views, and opinions expressed by experts are their own and do not reflect the views of RR Finance.