Bharat’s export market is set to soar, with projections estimating a rise to $835 billion by 2030, up from $431 billion in 2023. This growth is largely driven by the global China Plus One strategy, which aims to diversify supply chains away from China, according to a recent report by Nomura.
The strategy significantly benefits Bharat and Vietnam, positioning them as key players in the global supply chain. Nomura’s analysis highlights that Bharat’s large domestic market is attracting companies looking for alternatives to China for their manufacturing and supply chain needs.
Sectors such as electronics, apparel, toys, automobiles, capital goods, and semiconductor manufacturing are increasingly viewing Bharat as a prime investment destination. The electronics sector, in particular, is expected to see rapid growth, with exports projected to grow at a compound annual growth rate of 24 per cent, reaching $83 billion by 2030. Similarly, machinery exports are expected to more than double from $28 billion in 2023 to $61 billion by the end of the decade.
Despite modest production-linked incentive (PLI) disbursements, Bharat is well-positioned for deeper integration into global value chains. Factors contributing to Bharat’s appeal include its large market size, rapid economic growth, competitive labour costs, and a stable political and economic environment. These elements make Bharat an attractive destination for manufacturing consumer goods for both domestic use and export.
The shift away from China has already seen impressive results for companies and their manufacturing partners, who have moved to Bharat and Vietnam. Recently, reports indicated that US-based electric vehicle maker Tesla has asked its partners to focus on Bharat and Vietnam.
Nomura also predicts that Bharat’s share of global trade will increase to 2.8 per cent by 2030, driven by its growing production competitiveness. This surge in trade is expected to improve Bharat’s trade balance and current account, potentially leading to currency appreciation.
Investment interest in Bharat and Vietnam is growing, with US-based companies, especially in the electronics sector, making significant investments. Additionally, companies from Japan and Korea are investing in various sectors such as automotive, consumer durables, and electronics, aiming to leverage India’s expanding domestic market and its strategic position as a manufacturing hub.
Looking forward, the strengthening of Bharat’s manufacturing sector and its rising share in global exports are expected to drive corporate growth, supporting robust earnings growth rates of 12-17 per cent over the medium term.
