Latest news with #China+1
Indian Express
3 days ago
- Business
- Indian Express
New data raises concerns over India as an investment destination. Trade pacts can offer a solution
In 2024-25, foreign direct investment (gross) into India stood at $81 billion. But net FDI — essentially the difference between direct investment to and that by India — fell to just $353 million, down from $10.1 billion in the previous year. The reasons for this stunning collapse can be traced to an increase in investments by Indian firms abroad and greater repatriation/disinvestment by foreign firms from the country. Coming at a time of subdued domestic private investments, and when the country is trying to emerge as an attractive destination for firms moving operations out of China and integrate itself to a greater extent in global supply chains, this fall raises questions. Are both domestic and foreign firms finding more attractive investment opportunities in jurisdictions other than India? Do other countries offer a more favourable risk-return ratio? This deserves closer attention. The finance ministry has taken note of this trend and voiced its concern. In its most recent monthly economic review, the ministry says that increasing investment by Indian firms abroad 'even as uncertainty reigned in the world, warrants attention, especially given their cautious attitude towards domestic investment'. And while it also notes that gross FDI inflows have 'remained broadly stable', not only are flows lower than in 2021-22, but over the past few years, FDI (net inflows as a percentage of GDP) has remained well below recent highs as per data from the World Bank. Surprisingly, though, the RBI appears to be more sanguine about these trends. In its monthly bulletin, the Bank says that the moderation in net FDI, which reflects a rise in net outward FDI and repatriation FDI, 'is a sign of a mature market where foreign investors can enter and exit smoothly, which reflects positively on the Indian economy'. Compared to India, UBS says that the 'ASEAN 6's FDI dynamics are robust' based on the first three quarters of 2024, and McKinsey has recently noted that most Southeast Asian economies are 'seeing higher FDI in the fourth quarter' than in previous quarters. As these countries are India's competitors in the China+1 play, these trends call for policy intervention at multiple levels to address the issues/impediments that are holding back investments from both domestic and foreign firms. The near-term outlook for investments remains muddied as both firms and households face uncertainty due to US President Donald Trump's tariffs . The finance ministry's monthly review also notes that private sector capex 'could lag behind, with firms adopting a more cautious stance amid global uncertainty'. However, a successful conclusion of the ongoing trade talks with the US and the EU could have a positive impact on investments and exports. After all, investment is more likely to flow to regions with broader and deeper trade agreements. The finance ministry also notes that 'a successful US-India trade agreement could flip current headwinds into tailwinds, opening up new market access and energising exports'. The government must press ahead with these trade deals.
Time of India
20-05-2025
- Business
- Time of India
Benefit for India: How Indian ports will gain from China+1 strategy
are positioned to gain advantages from the worldwide China+1 strategy, according to Moody's Ratings' latest report. As organisations establish manufacturing facilities in India, diversifying their production and supply networks beyond China, this could substantially enhance port activities across the country. Tired of too many ads? go ad free now Moody's analysis indicates that whilst Chinese ports might encounter immediate financial difficulties, ports in countries such as India and Indonesia could experience increased operations as international organisations seek to decrease their Chinese dependencies. "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 said. Also Read | Moody's additionally observed the pressure that disputes, including recent , could impose on developing markets. The analysis indicates that Indian and Indonesian ports primarily handle cargo destined for their respective domestic markets. India's diverse export portfolio and strong internal market have resulted in minimal impact from US tariffs, setting it apart from other economies in terms of trade vulnerability. Whilst maintaining a positive outlook, Moody's has adjusted India's growth projection for 2025 downwards to 6.3% from 6.7%, whilst predicting a 6.5% growth rate for 2026. The strategic positioning of Indian ports appears advantageous as patterns undergo significant changes, presenting opportunities for growth and development. Also Read |
Time of India
20-05-2025
- Business
- Time of India
Benefit for India: How Indian ports will gain from China+1 strategy - Moody's explains
Moody's analysis indicates that whilst Chinese ports might encounter immediate financial difficulties. (AI image) Indian ports are positioned to gain advantages from the worldwide China+1 strategy, according to Moody's Ratings' latest report. As organisations establish manufacturing facilities in India, diversifying their production and supply networks beyond China, this could substantially enhance port activities across the country. Moody's analysis indicates that whilst Chinese ports might encounter immediate financial difficulties, ports in countries such as India and Indonesia could experience increased operations as international organisations seek to decrease their Chinese dependencies. "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. Also Read | Forced to destroy! US rejects 15 mango shipments from India, exporters estimate losses of $500,000 Moody's additionally observed the pressure that disputes, including recent India-Pakistan tensions , could impose on developing markets. The analysis indicates that Indian and Indonesian ports primarily handle cargo destined for their respective domestic markets. India's diverse export portfolio and strong internal market have resulted in minimal impact from US tariffs, setting it apart from other economies in terms of trade vulnerability. Whilst maintaining a positive outlook, Moody's has adjusted India's growth projection for 2025 downwards to 6.3% from 6.7%, whilst predicting a 6.5% growth rate for 2026. The strategic positioning of Indian ports appears advantageous as global manufacturing patterns undergo significant changes, presenting opportunities for growth and development. Also Read | Why India can be a big winner of Donald Trump 2.0 era if it plays its cards right Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
20-05-2025
- Business
- Time of India
Indian ports set to gain from ongoing supply chain shift? Moody's weighs in on the China+1 strategy
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. Live Events 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.
BusinessToday
19-05-2025
- Business
- BusinessToday
US Tariff Uncertainty Dampens Outlook For Malaysia's Semiconductor Industry: CGS
Renewed US tariff measures are clouding the growth outlook for Malaysia's semiconductor industry, with local manufacturers scrambling to adjust production plans amid shifting trade policies, according to a new report by CGS International. The research house highlights that 32% of the sector's revenues in fiscal 2024 were exposed to the United States and 18% to China, leaving key players like Genetec, Unisem, and SAM Engineering particularly vulnerable on the US side (33–81% exposure) and ViTrox and Mi Technovation on the China side (37–44% exposure). Ahead of a 90-day tariff pause that ends on 9 July 2025, CGS's channel checks found some firms are preloading orders, yet raw-material and component shortages have capped any meaningful sales surge. Meanwhile, final decisions on semiconductor-specific tariffs—and broader US efforts to reshore chip production—remain pending, perpetuating uncertainty. Earnings Downgrades and EPS Forecast Cuts Anticipating a slowdown in capital-expenditure by chipmakers and weaker downstream demand, CGS has slashed its calendar-year 2025–26 EPS forecasts by around 22% for its Malaysian coverage universe. While a short-lived bump in second-quarter earnings is possible from front-loaded orders, lingering tariff risks and elevated inventories—particularly in the automotive and industrial segments—are expected to dampen profits in the second half of 2025. CGS now sees flat sector EPS in 2025 and 21% growth in 2026, figures that sit 15–17% below Bloomberg consensus. Valuation Disconnect Fuels Underweight Calls Despite recent share-price declines, the report warns that sector valuations remain disconnected from fundamentals. On CGS's revised forecasts, the Malaysian semiconductor index trades at 24.9x 2026 P/E, well above the pre-pandemic 2015–19 average of 17.8x. With consensus earnings still too bullish, CGS expects a re-rating toward historical multiples, particularly as tariff differentials and supply-chain rerouting under a China+1 strategy materialise slowly amid heightened US scrutiny. Stock Ratings Reflecting these headwinds, CGS maintains an Underweight stance on the sector. It has reduced positions in Unisem, MPI, Inari, ViTrox, Genetec, and SAM Engineering; kept Hold on Pentamaster and Uchi Technologies; and upgraded Mi Technovation to Add, citing its stronger positioning in China-centred and server-focused markets. Related
