India’s Global Export Share at 1% vs. China’s 26%: NITI Aayog Report

In Short: While countries like Vietnam, Thailand, and Malaysia have successfully leveraged the China-Plus-Onestrategy, India has struggled to fully seize these opportunities, falling behind in expanding its global trade share. The report highlights why India is lagging and outlines the necessary steps to turn the tide.

India Lags in China-Plus-One Strategy, Needs Policy Reforms: NITI Aayog Report

As U.S. President-elect Donald Trump prepares to impose higher tariffs on key trade partners, India faces a critical opportunity to position itself as a global manufacturing hub under the China-Plus-One strategy. However, NITI Aayog's latest Trade Watch Quarterly (April-June 2024-25) report warns that India must undertake significant policy reforms to capitalize on this moment effectively.

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Key factors such as cheap labor, simplified tax policies, lower tariffs, and Free Trade Agreements (FTAs) have enabled these nations to significantly enhance their export capabilities, setting a benchmark for India to follow.

The China-Plus-One Opportunity

The China-Plus-One strategy encourages multinational corporations to diversify their supply chains and manufacturing units away from China. Rising geopolitical tensions, disruptions in supply chains, and U.S. trade restrictions on China have made this approach increasingly popular.

While countries like Vietnam, Thailand, and Malaysia have leveraged this strategy to expand their export base, India has lagged behind, missing critical opportunities. According to NITI Aayog, the lack of competitive policies, high tariffs, and complex regulatory frameworks are key reasons for India’s underperformance.

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Can Trump’s Tariffs Benefit India?

Donald Trump’s proposed tariffs—25% on imports from Mexico and Canada and an additional 10% on Chinese goods—are aimed at reshaping U.S. trade relations. These measures could disrupt global supply chains but also create opportunities for nations like India to capture a larger share of the U.S. market.

NITI Aayog CEO BVR Subrahmanyam noted, “Trump’s tariffs could open significant doors for India, but we need to act swiftly. The ball is in our court, and missing it would be our failure.”

India’s Current Standing

India’s trade performance has seen some improvement, with total trade growing by 5.45% in the first half of FY 2024-25. Exports reached $231 billion, while imports stood at $345 billion. However, sectors like electronics—where India’s global export share is just 1% compared to China’s 26%—highlight the gaps in India’s competitiveness.

Dr. Prabhakar Sahu, Program Director at NITI Aayog, emphasized, “Our ability to compete globally depends on targeted reforms and timely execution of trade strategies. Reports like Trade Watch Quarterly will help us monitor and adapt to evolving trade trends.”

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The Path Forward

NITI Aayog has outlined several recommendations for India to capitalize on the China-Plus-One opportunity:

• Simplify tax structures to attract foreign investments.
• Accelerate Free Trade Agreements (FTAs) with key trading partners.
• Boost infrastructure for manufacturing, especially in high-demand sectors like electronics and mobile manufacturing.
• Expand outreach to emerging markets while strengthening existing partnerships with the U.S. and the European Union.

The question remains: Will India rise to the occasion as Trump’s tariff policies reshape global trade? With the right reforms and decisive action, India can position itself as a leading alternative in the global supply chain. However, the window of opportunity is narrow, and bold steps are essential to ensure India doesn’t miss this chance to redefine its role in global trade.