According to reports, India is expected to benefit as the US imposes further restrictions on investments in strategic sectors in China. This shift could lead global companies to reduce their exposure in China and redirect investments to other regions, including India and Southeast Asia. India’s pharmaceutical and consumer electronics industries stand to gain the most from this change, as the country strengthens its manufacturing competitiveness.
As per reports, ASEAN nations and India are becoming more attractive to foreign investors due to their openness and improving production capabilities. Indian pharmaceutical companies, already major suppliers of generic drugs to the US, could see further opportunities if the US reduces its reliance on China for active pharmaceutical ingredients. Additionally, India and Vietnam are likely to benefit from increased investments in consumer electronics as companies diversify away from China.
Major firms like Foxconn and Pegatron have already set up facilities in India to manufacture iPhones, and Tata Electronics is expanding its production hub following its recent acquisition of Wistron’s stake. Moody’s expects the “China+1” strategy, where companies maintain a presence in China while expanding in other regions, to continue as businesses de-risk over time.
While these developments present opportunities for India and ASEAN, reports cautioned that the full extent of the gains remains uncertain, as trade and investment shifts have been occurring since 2018. Furthermore, increased US restrictions on China could slow China’s exports, which might negatively impact Asia-Pacific economies with strong ties to Chinese manufacturing.