The China +1 strategy will work, Finance Minister Nirmala Sitharaman emphasized in an interview to HT recently as she spoke about a trade deal sealed between India and the US on Monday, bringing down tariffs on Indian imports to 18%.
New Delhi: Union Finance Minister Nirmala Sitharaman at a press conference after presenting the Union Budget 2026-27. (Hindustan Times/Arvind Yadav)The trade deal not only reduces US tariffs on Indian imports but also ends months of tense trade negotiations between the two countries.
Follow live updates on India-US trade deal here.Sitharaman expressed hope that the agreement would come as a Big relief for Indian exportersnow that they stand at an advantage over their rivals. “This is a very welcome move and will be a big relief to our exporters,” Sitharaman said.
He also said that the recently concluded talks on trade between India and the US would pave the way for the full implementation of the China +1 strategy.
What is China +1 strategy? China+1 is a strategy that aims to help businesses reduce their dependence on China and expand their investment horizons in other countries. The term was coined in 2013 after seeing an overconcentration of global business in China, largely driven by the country’s low manufacturing costs.
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Simply put, the strategy aims to get businesses to add one more country besides China to their investment pool.
According to the previous Business Standard According to the report, a group of 18 global economies, including India, came together under this supply-chain diversification strategy. Other countries seen as popular +1 destinations are Thailand, Vietnam and Indonesia.
What Sitharaman said about the India-US trade agreementAccording to the finance minister, the India-US trade deal could pave the way for the “full implementation” of the China +1 strategy. HT is talking about Weakness of Indian currency Despite India’s foreign exchange reserves breaching the $700 billion mark, Sitharaman said: “So why is the rupee weakening? Because our capital inflows are coming down. Why are capital inflows coming down? Some people have exited after booking profits, but why haven’t they come in? We have to convince big fund managers but others are not having problems.”
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He also expressed hope that the Indo-US trade deal could turn the tide. “But after last night’s conversation, I think the situation will change. You will see that the China +1 strategy is now fully effective,” he said.
US tariffs on India have now been reduced to 18% from 50% imposed by Donald Trump. Half of this tariff was imposed as a penalty for India trading oil with Russia.
Trump has now said that Prime Minister Narendra Modi has assured him that New Delhi will end oil trade with Moscow, a claim that Indian authorities have yet to confirm. There has also been no official clarification on Trump’s claim that India has committed more than $500 billion worth of US energy, technology, agricultural products, coal and other goods.
