Indian ports set to gain from ongoing supply chain shift? Moody's weighs in on the China+1 strategy

Time of India

20-05-2025

Indian ports
stand to benefit from the global China+1 strategy,
Moody's Ratings
noted in its latest report released on May 20. The strategy, which involves companies diversifying their manufacturing and supply chains away from
China
, could provide a significant boost to Indian ports as businesses set up operations in the country.
In the report, Moody's highlighted that while China's port finances might face short-term challenges, ports in countries like India and Indonesia could see increased activity as global companies look to reduce reliance on China. This shift comes amid broader
geopolitical tensions
, with Moody's also noting the stress that such conflicts, including recent tensions between India and Pakistan, could place on emerging markets.
"In Asia, Chinese ports' financials could weaken although most have the financial capacity to withstand near-term stresses. And ports in India and Indonesia could benefit from the China+1 strategy – companies' effort to diversify their manufacturing and supply chain operations by establishing facilities in countries outside China," the Moody's report said.
Additionally, it stated that most of the cargo moving through Indian and Indonesian ports serves the domestic market.
The ratings agency's report also stressed on the recent geopolitical tensions between India and Pakistan originating from Pahalgam attack where 26 civilians were killed by terrorists. "...geopolitics are an additional stress for emerging markets, including the flare-up of tensions between India and Pakistan," said the report.
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Beyond geopolitical concerns, the report also pointed out that India's exposure to US tariffs is relatively low compared to other markets, thanks to its diversified export base and a robust domestic economy. " India has a relatively low overall exposure – and more diversified exports to the US. These attributes plus its large domestic economy position India well to deal with US tariffs," it said.
Moody's has, however, revised India's 2025 growth forecast down to 6.3% from the previous 6.7%, though they remain optimistic for 2026, forecasting growth of 6.5%.
With the
global manufacturing shift
gaining momentum, Indian ports may just be in the right place at the right time to capitalise on this trend.