According to a JOC report, during the pandemic, strong consumer demand in North America and the transfer of some purchase orders have driven a surge in trade between the United States and India.

Bhavik Mota, head of maritime management for Maersk's Central and Western Asia region, stated that even if economic growth slows down, the 'China plus one' procurement strategy of US importers will continue to bring benefits to Indian manufacturers. The China Plus One strategy is a business strategy that avoids investing solely in China and diversifies its business to other countries. A more detailed introduction is attached at the end of the article

In the first half of 2022, although inflation concerns intensified and had an impact on consumer behavior in Western markets, we saw sustained demand for goods from India to North America, 'Mota said.

According to data from PIERS, a global subsidiary of S&P, container transportation between India and the United States increased by 8.3% year-on-year in the first half of 2022, after a surge of 23.5% throughout the year.

This growth is largely driven by imports from India by the United States, accounting for approximately two-thirds of the 1.16 million TEU freight volume between the two countries in the first half of this year. After a surge of 31.4% in 2021, the import freight volume from India increased by 12.4% in the first half of this year; The outbound freight volume from the United States to India increased by 1.1% in the first half of this year, after increasing by 10.5% last year.

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According to data from the Indian Ministry of Commerce, in the fiscal year 2021-2022 (as of March this year), the total trade in goods between India and the United States increased by 48.3%, reaching a historical high of $119.42 billion, promoting the United States to become India's largest trading partner.

Daniel Krassenstein, global supply chain manager for Procon Pacific, an American industrial packaging manufacturer, said that China remains the world's largest production center, but tariff conflicts, the impact of the pandemic, and rising labor costs are slowly weakening China's dominant market position. He added that due to automation and worker training, the increase in industrial productivity can help reduce manufacturing costs in India, especially for 'labor-intensive' consumer goods.

A senior executive of a clothing manufacturer in Mumbai, who declined to be named, pointed out that even before the pandemic triggered a surge in US consumer demand, US importers had been seeking to reduce their dependence on Chinese manufacturing.

The executive said, 'For example, compared to the same period in 2019, China's clothing exports to the United States decreased by 24.2% in January 2022, while US imports from India surged by 53.4% The detailed enforcement strategy is expected to further drive the potential demand for Indian goods

In addition, major sea freight carriers have increased their capacity between the United States and India to cope with growing demand. Sunil Vaswani, Executive Director of the Container Shipping Companies Association representing foreign carriers operating in India, said, 'Due to increased efforts to transport empty containers back to India and the introduction of additional capacity by shipping companies, India's exports have increased in the past two years

According to the JOC report, MSC and Maersk have seen the largest increase in cargo volume among the leading shipping companies operating the Indo US trade route. In the first half of 2022, due to a 178.3% increase in freight volume, MSC processed 34.1% of US imports from India, up from 20.8% in the same period in 2020. Due to a 212.3% increase in freight volume, Maersk's share has jumped from 9.5% in 2020 to 17.5%.

It is reported that the 'China Plus One' strategy is a business strategy that avoids investing solely in China and diversifies its business to other countries. Over the past 20 years, Western companies have invested in China due to low production costs and a huge domestic consumer market. But with the increase in operating costs in China, the advantages of cheap labor and market demand initially provided by China have gradually been overshadowed by the advantages that ASEAN countries can provide.

Its benefits include cost control, risk diversification, and access to new markets in the economy. But this strategy also has its own difficulties, including adapting to new laws, new markets, and streamlining business operations in multiple locations. And it is unrealistic to completely leave China now. The China Plus One strategy has also brought benefits to China, enabling the development of high value-added industries while maintaining low-end manufacturing. However, it did reduce the amount of manufacturing growth and provide an opportunity for prosperity for other economies.

 来源：搜航网