India Leads As Investment Haven For US, European Companies Derisking Supply Chains By Reducing Reliance On China: Survey

India has emerged as the top investment destination for senior executives from Europe and the US, who are seeking to diversify their manufacturing away from China and toward other emerging markets.

According to a survey conducted by the Capgemini Research Institute, which involved 759 senior executives of companies actively considering investments in India, 65 per cent of them plan to increase their investment significantly—by more than 50 per cent compared to the past three years.

The survey highlights other significant emerging markets as well.

South-East Asia ranks second, with 60 per cent of respondents expressing readiness to increase their investments by 50 per cent in the next three years, Business Standard reported.

Africa stands third as a favoured investment destination, with 53 per cent of executives planning increased spending.

In contrast, Mexico appears less favoured, with only 13 per cent of surveyed executives planning substantial investments.

The study, titled "Reindustrialisation Strategies in Europe and the U.S.," projects that reindustrialisation investments in emerging markets by European and US companies will reach an estimated $3.4 trillion over the next three years.

"Mounting geopolitical pressures, stringent policies, and changing business dynamics have led companies with supply chains based in China to explore alternatives in other regions," the report said.

It added that 58 per cent of surveyed executives said that "they are de-risking their supply chains by investing in other emerging countries to reduce reliance on China. To this end, businesses are distributing their critical assets (such as production facilities, warehouses, and logistics centers) across geographies such as India, Southeast Asia, Africa, and Mexico".

"Over the past five years, Apple’s suppliers have invested $16 billion to relocate production away from China. Key players in this shift include Foxconn (Taiwanese chip-making giant and one of Apple’s largest suppliers), which has moved some of its production capacity to India," it added.

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