'India, ASEAN can jointly emerge as Indo-Pacific production hub'

New Delhi: The changing landscape of global industry amid the China+1 strategy presents major opportunities for India and ASEAN, as the two sides can transform investment competition into a shared production strategy, which will not only make them alternatives to China that multinational companies are looking for but also establish one of the most important manufacturing centres in the Indo-Pacific economy, an article said.

The China+1 strategy needs to evolve into a shared India–ASEAN production strategy, according to the India Narrative article.

A study by the Economic Research Institute for ASEAN and East Asia (ERIA) shows that ASEAN has relatively strong connections to global production networks, while India’s integration into global value chains still has room for improvement. The study highlights the importance of cross-regional investment and identifying manufacturing complementarities, the article states.

From the perspective of regional production network theory, economic benefits are greater when companies can combine the advantages of different locations. India has a large domestic market, technological capabilities, and a broad industrial and labour base, while ASEAN offers supplier networks, ports, industrial zones, export experience, and access to various markets across East Asia and the Pacific.

If both sides operate independently, they risk duplicating investments and competing in the same products. Conversely, if they are connected, components can be produced in one country, processed in another, assembled at the most efficient location, and marketed through regional trade networks. This is the difference between merely attracting investment and building collective competitiveness, the article observed.

India and ASEAN need to develop a cross-regional supply chain map. This mapping should identify priority industries, missing suppliers, technological requirements, and the most competitive production stages in each country. Electronics, semiconductors, electric vehicle batteries, pharmaceuticals, and industrial machinery are suitable starting sectors. The trade agreement between the two sides should be directed towards facilitating trade in intermediate goods and components. Besides, investment cooperation must go beyond individual countries’ investment promotion efforts, the article stated.

India needs to strengthen manufacturing competitiveness, improve regulatory certainty, create opportunities for technology partnerships, and leverage its domestic market to achieve production scale. India can also serve as a centre for design, engineering, industrial software, and the production of selected components, it stressed.

ASEAN needs to strengthen connectivity among its member states, harmonise standards, and connect industrial zones and ports with Indian supplier networks. Indonesia can contribute through critical minerals, battery materials, and downstream industrial development. Malaysia can strengthen semiconductors and electronics, Thailand automotive manufacturing, and Vietnam electronics manufacturing and export networks, the article added.

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