China Plus One: How India Unlocks a Strategic Advantage

India’s Role in the China Plus 1 Diversification Strategy

For over two decades, China sat at the centre of global manufacturing and sourcing strategies. Its unmatched scale, speed, and infrastructure made it the default choice for global buyers across industries from electronics and automotive components to apparel and pharmaceuticals.

But global supply chains no longer operate in a world defined by efficiency alone.

Geopolitical risk, rising costs, trade disruptions, regulatory shifts, and over-dependence on a single geography have forced companies to reassess how resilient their sourcing strategies really are. As a result, the China+1 diversification strategy has moved from boardroom discussion to operational priority.

The key question for many global leaders today is no longer whether to diversify beyond China but where to diversify next.

Increasingly, the answer is India.

Understanding China+1: What Global Buyers Are Really Looking For

China+1 is often misunderstood as a simple geographic substitution. In reality, it is a risk-management and resilience strategy, not a cost-cutting exercise.

For most global buyers, China+1 means:

• Reducing single-country dependency
• Building supply chain resilience
• Maintaining cost competitiveness
• Ensuring consistent quality control
• Improving long-term scalability
• Creating geopolitical and regulatory flexibility

Importantly, China+1 does not mean exiting China altogether. Instead, it means adding at least one additional manufacturing base that can complement existing operations.

That “+1” must be capable of handling complexity, compliance, scale, and quality without increasing operational risk. This is where India enters the conversation.

 

Why India Is Emerging as a Serious China+1 Candidate

India is not new to global manufacturing. What is new is the scale, seriousness, and maturity with which India is now engaging with global sourcing requirements.

Several structural shifts are converging at the same time:

• Large-scale government support for manufacturing and exports
• Massive infrastructure upgrades (ports, logistics corridors, industrial parks)
• A deeper supplier ecosystem across sectors
• Greater exposure to international compliance and quality standards
• A younger, skilled, and increasingly tech-enabled workforce

For global buyers, India today looks very different from India a decade ago.

Beyond Cost Arbitrage: India’s Strategic Value in China+1

One of the most significant mistakes companies make when evaluating India is focusing solely on cost. While India does offer competitive labour costs, its true strategic value lies in several other areas:

1. Supply Chain Resilience

India provides geographic diversification while remaining connected to Asia’s manufacturing ecosystem. For companies prioritising continuity over disruption, this aspect is crucial.

2. Market Proximity

India is not just a manufacturing hub; it is also one of the fastest-growing consumer markets in the world. For many global buyers, sourcing from India supports both export and domestic market strategies.

3. Talent and Engineering Depth

India’s strength in engineering, process design, and technical talent makes it particularly attractive for industries that require customisation, tooling, and continuous improvement.

Sector Depth: Where India Fits Best Today

India’s role in China+1 is not uniform across industries. It performs exceptionally well in certain categories and continues to improve rapidly in others.

Electronics and Electrical Components

Once considered a weak spot, India’s electronics manufacturing ecosystem has expanded significantly, particularly in assembly, components, and sub-systems.

Automotive and Auto Components

India is already a global hub for automotive components, exporting to major OEMs worldwide. Process maturity and quality control standards are well established.

Pharmaceuticals and Life Sciences

India remains one of the largest suppliers of APIs and finished formulations globally, with strong regulatory compliance capabilities.

Textiles, Apparel, and Home Products

India’s vertical integration, from raw materials to finished goods, offers global buyers more control over quality and timelines.

Industrial Goods and Engineering Products

Precision engineering, castings, forgings, and industrial machinery are emerging as strong China+1 categories.

Quality Control: The Deciding Factor for Global Buyers

For most global buyers, diversification only works if quality remains consistent.

This is often where early India sourcing attempts fail, not because India lacks capability, but because quality control systems are not structured correctly from day one.

Key realities:

• Supplier capability varies widely
• Documentation and process discipline differ across regions
• International standards are not always uniformly interpreted This makes quality check frameworks non-negotiable.

Why Global Sourcing from India Requires Local Intelligence

India presents a diverse and regionally nuanced manufacturing landscape, rather than a centralised ecosystem. The variations in supplier behaviour, infrastructure quality, labor practices, and compliance culture are significant and can differ dramatically from one state to another or even between different industrial clusters within the same state.

For global buyers looking to source products from India, this diversity poses two primary challenges:

1. Identifying the Right Suppliers: It is crucial for buyers to distinguish between merely available suppliers and those that align with specific quality, capability, and reliability requirements. A supplier that may seem adequate on paper might not meet the international standards that buyers require.

2. Translating Global Expectations into Local Execution: Expectations in terms of quality, delivery timelines, and compliance standards can be markedly different in India compared to other regions. Effectively translating these global standards into practical, on-the-ground execution requires a nuanced approach. Consequently, successful global sourcing from India cannot be approached as a purely remote or desk-based operation. Instead, it necessitates a more immersive strategy that includes:

Local Market Understanding: A deep awareness of regional market dynamics, including economic conditions, competitive landscape, and customer preferences.

Cultural Fluency: An appreciation for local customs, business etiquette, and communication styles that can impact negotiations and relationships.

On-Ground Presence: Establishing a local presence enables businesses to build relationships, monitor operations closely, and respond swiftly to challenges that may arise.

Structured Supplier Governance: Implementing robust processes and frameworks to ensure that suppliers adhere to necessary standards while fostering continuous improvement.

By addressing these factors, global buyers can enhance their sourcing effectiveness in India, thereby overcoming the inherent complexities of its regional manufacturing ecosystem. Where China+1 Strategies Fail and Why

Many global companies underestimate the execution gap.

Common failure points include:

• Rushing supplier onboarding
• Assuming quality standards will self-align
• Over-reliance on documentation without verification
• Lack of continuous quality control monitoring
• No local escalation or accountability mechanism China+1 is not a vendor swap; it is a system redesign.

How ET2C Supports Global Buyers in China+1 Execution

This is where ET2C plays a critical role.

ET2C works with global buyers and global sourcing teams who want to engage with India strategically, not experimentally.

Rather than acting as a transactional intermediary, ET2C operates as an on-ground sourcing and risk-management partner.

ET2C’s Role in the China+1 Journey

1. Supplier Discovery & Validation ET2C identifies suppliers aligned with sector, scale, and compliance needs, not just cost.

2. Quality Check & Audit Frameworks From initial factory audits to ongoing quality control, ET2C ensures standards are measurable and enforced.

3. Execution Oversight On-ground teams monitor production, timelines, and deviations, reducing surprises.

4. Risk Mitigation Cultural, regulatory, and operational risks are identified early, not after shipment.

5. Long-Term Partner Development ET2C helps convert vendors into reliable supply partners over time.

India + China: A Complementary Model, Not a Replacement

The most resilient global buyers are not choosing between China and India. They are building China + India strategies where each geography plays to its strengths.

China continues to lead in:

• Ultra-high-volume manufacturing
• Speed at scale
• Deep supplier specialisation

India excels in:

• Supplier diversification
• Engineering-led manufacturing
• Cost-quality balance
• Market access and long-term scalability
• China+1 works best when India is integrated thoughtfully, not rushed into.

What Global Buyers Should Ask Before Choosing India

Before committing, decision-makers should ask:

• Which product categories truly fit India today?
• What level of quality control is required?
• Do we have on-ground visibility?
• How will supplier performance be measured?
• Who owns escalation and accountability locally? India rewards preparation. It penalises assumptions.

The Strategic Takeaway

India is rapidly evolving beyond being just an alternative site for manufacturing. With the right combination of products, strategic partners, and well-defined processes, it is establishing itself as a vital pillar in the global sourcing landscape. However, achieving success in this transition requires meticulous execution and operational discipline rather than relying solely on enthusiasm or potential.

For global buyers considering the China+1 strategy, India presents an attractive opportunity due to its significant scale, skilled workforce, and inherent resilience. To unlock these advantages, it is crucial to implement robust quality control measures, establish effective supplier governance, and maintain vigilant on-ground oversight from the outset. This strategic framework not only helps mitigate risks but also ensures the creation of a reliable and efficient supply chain.

Are You Ready to Explore India as an Integral Part of Your China+1 Strategy?

At ET2C, we specialize in partnering with global buyers, sourcing teams, and international manufacturers who are eager to develop reliable, compliant, and scalable supply chains in India. If you are currently evaluating India as a manufacturing option or struggling to bring your China+1 strategy to life, we invite you to engage in a strategic conversation with our team.

By collaborating with us, you can gain insights tailored to your needs and discover the full spectrum of opportunities that India has to offer. To explore these possibilities further, please connect with our team at contact@et2cint.com. We look forward to assisting you on this exciting journey.

Frequently Asked Questions (FAQ)

1. Why are global buyers adopting a China+1 diversification strategy?

Global buyers are increasingly adopting China+1 to reduce over-reliance on a single geography. The strategy improves supply chain resilience, lowers geopolitical risk, and provides long-term flexibility while maintaining cost efficiency and quality control.

2. How does India fit into global sourcing strategies?

India fits into global sourcing strategies as a complementary manufacturing base that offers sector depth, engineering talent, competitive costs, and expanding export infrastructure. It is particularly well-suited for companies seeking diversification without disrupting existing Asian supply chains.

3. Is India ready to meet global quality standards?

Yes, but success depends on execution. India has strong manufacturing capabilities, but consistent outcomes require structured quality check systems, supplier audits, and ongoing quality control throughout the production cycle.

4. What industries are best suited for China+1 sourcing from India?

India performs strongly across:

• Automotive components
• Pharmaceuticals and life sciences
• Electronics and electrical assemblies
• Textiles, apparel, and home products
• Industrial and engineering goods

Each sector benefits from different sourcing and quality control approaches.

5. What are the biggest risks global buyers face when sourcing from India?

Common risks include supplier inconsistency, inadequate quality control frameworks, and a lack of on-ground oversight. These risks are manageable when global buyers implement proper supplier validation, continuous quality checks, and local execution support.

6. Why is on-ground presence important for global sourcing in India?

India’s manufacturing ecosystem is highly regional. On-ground presence ensures accurate supplier evaluation, real-time quality control, faster issue resolution, and cultural alignment critical for long-term sourcing success.

7. How does ET2C support global buyers in China+1 execution?

ET2C supports global buyers by providing supplier discovery, factory audits, structured quality checks, production oversight, and continuous quality control—helping companies execute China+1 strategies with confidence and consistency.

8. Can India fully replace China in a global sourcing strategy?

For most global buyers, India is not a replacement but a strategic complement. China+1 works best when India and China are used together, each contributing strengths across scale, specialisation, and risk diversification.

9. How long does it take to build a reliable sourcing base in India?

Timelines vary by sector and complexity, but most global sourcing programs require several months of supplier evaluation, quality checks, and pilot runs before reaching stable, scalable production.

10. Who should consider working with ET2C?

ET2C is best suited for global buyers, international manufacturers, and sourcing teams that want to enter or expand in India with strong quality control, local accountability, and long-term sourcing discipline.