Enhancing India's Supply Chain via Increased FDI from China: Economic Survey Insights

The Economic Survey suggests that increased foreign direct investment (FDI) from China can enhance India's participation in global supply chains and boost exports. It highlights that India should emulate the strategies of East Asian economies, focusing on reducing trade costs and facilitating foreign investment. The Survey points out that FDI from China is more promising than trade for expanding India's export market, especially to the US.

According to the Economic Survey, increased foreign direct investment (FDI) inflows from China can significantly enhance India's participation in global supply chains and drive export growth.

The Economic Survey emphasizes that India, aiming to deepen its involvement in global value chains (GVCs), should learn from the success strategies of East Asian economies, particularly in reducing trade costs and facilitating foreign investment.

The Survey highlighted two strategic choices for India to benefit from the 'China plus one' approach: integrating into China's supply chain or promoting FDI from China. It concluded that focusing on FDI from China appears more promising for boosting exports, particularly to the US, following the precedent set by East Asian economies.