India's aspirations to become the world's manufacturing hub may be undermined by a recent US-China trade agreement that reduced tariffs on Chinese goods. The shift could lead to stalled investments in India, particularly as low-cost assembly might persist while value-added production risks decline. This news comes despite prior optimism when Apple considered shifting iPhone production to India. While Indian exports are rising, particularly in electronics and textiles, the new dynamics could challenge India's role as an alternative to China in global supply chains.
Ajay Srivastava of GTRI stated, "India's low-cost assembly lines may survive, but value-added growth is in danger," highlighting the potential setback for India's manufacturing ambitions.
Shilan Shah from Capital Economics remarked, "India is well positioned to be an alternative to China as a supplier of goods to the US in the immediate term" just before the US-China trade agreement.
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