Can China+1 help India create millions of jobs and boost manufacturing? 

As global companies look beyond China for manufacturing and sourcing, India is emerging as one of the biggest beneficiaries of the China+1 strategy. Experts believe the shift could unlock billions of dollars in investments, create millions of jobs, and accelerate India's journey toward becoming a global manufacturing powerhouse.

The restructuring of global supply chains has become one of the most significant economic trends of the past decade. Triggered by geopolitical tensions, US-China trade disputes, the COVID-19 pandemic, and concerns over supply-chain concentration, multinational corporations are increasingly diversifying their manufacturing footprints beyond China.

India's China+1 strategy has positioned the country as a leading alternative destination for global investment, particularly in sectors such as electronics, pharmaceuticals, auto components, textiles, and specialty chemicals.

Why companies are looking beyond China

The China+1 strategy refers to businesses maintaining operations in China while simultaneously expanding manufacturing and sourcing capabilities in other countries to reduce risk.

The trend has accelerated since 2020 as companies sought greater resilience against disruptions caused by tariffs, lockdowns, and geopolitical uncertainties.

India offers several advantages that make it an attractive destination for global manufacturers. These include a large skilled workforce, competitive labour costs, strong engineering talent, improving infrastructure, and government-backed initiatives such as the Production Linked Incentive (PLI) scheme.

According to industry estimates, India's electronics exports have grown by nearly 35% year-on-year, while the country's share in global electronics manufacturing services (EMS) continues to rise.

Investment opportunities

Experts say the China+1 movement represents a long-term structural shift rather than a temporary trend.

Naman Shah, MD & CEO of LeSol Group, believes India is moving from being a backup manufacturing destination to becoming a primary production partner for global brands.

"Companies that would have sourced entirely from China two years ago are now designating Indian manufacturers as primary partners—not contingency plans," Shah said.

This shift is already translating into new production orders, factory expansions, and long-term supply agreements.

India's electronics manufacturing sector, currently valued at around $105 billion, is targeting a massive expansion to $500 billion by 2030, driven largely by global supply-chain diversification.

Major multinational firms including Apple, Samsung, and Foxconn have expanded their manufacturing footprint in India, while several global suppliers are evaluating fresh investments in the country.

More jobs

Beyond investment inflows, the China+1 strategy could become a major employment generator.

Traditional assembly operations create direct factory jobs, but experts argue that the larger opportunity lies in building a complete manufacturing ecosystem that includes engineering, design, research and development (R&D), testing, and supply-chain management.

"When engineering and product development are co-located with manufacturing, the employment ecosystem expands significantly," Shah explained.

Such ecosystems create opportunities for:

Engineers and product designers
Electronics developers
Supply-chain specialists
Quality assurance professionals
Logistics and warehousing workers
MSME suppliers and component manufacturers

The multiplier effect could generate higher-value jobs that are more difficult to relocate than simple assembly-line work.

Government policies

India's policy framework has played a crucial role in attracting manufacturers.

The government has allocated nearly ₹2 lakh crore under various PLI schemes aimed at boosting domestic production across strategic sectors. Reforms such as higher FDI limits, single-window clearances, and infrastructure initiatives like PM Gati Shakti have also improved the ease of doing business.

India's demographic advantage is another major strength. With a median age of around 28 years compared to China's approximately 39 years, the country offers a young workforce that can support long-term industrial expansion.

Trade agreements with countries such as the UAE and Australia are also helping Indian manufacturers gain better access to international markets.

Challenges remain

Despite the opportunity, industry leaders caution that India must avoid becoming merely an assembly hub.

"If India only imports kits and assembles them here, we capture a tiny slice of the value chain and remain permanently dependent on someone else's supply chain," Shah warned.

Challenges such as skill gaps in advanced manufacturing, semiconductor capabilities, logistics costs, and global competition from Vietnam, Indonesia, Mexico, and Bangladesh remain significant.

However, experts believe India's combination of market size, engineering talent, and supportive policy environment gives it a unique advantage.

Years ahead

The China+1 strategy is expected to unfold over the next decade, offering India a rare opportunity to deepen its manufacturing capabilities and strengthen its position in global supply chains.

If the country successfully moves beyond assembly-led growth toward design, engineering, and innovation-driven manufacturing, the benefits could be transformative—bringing substantial foreign investment, creating high-quality jobs, boosting exports, and driving sustained economic growth.

As global supply chains continue to evolve, the decisions made today could determine whether India becomes a permanent manufacturing hub or misses another historic industrial opportunity.