China+1 strategy’ set to gain momentum after India-US trade deal, says Sitharaman

New Delhi | 4 Feb 2026 Finance Minister Nirmala Sitharaman has said that the recently sealed India-US trade deal will help the “China+1 strategy” play out fully, bringing relief to Indian exporters and opening new opportunities for investment. The agreement lowers US tariffs on Indian goods to 18% and brings an end to months of tough and uneasy trade negotiations between the two countries. Calling the deal a positive step, Sitharaman said it would give Indian exporters a clear advantage over competitors. “It is a very welcome move and will be a big relief to our exporters,” she said, adding that the outcome of the talks could significantly change global investment patterns in India’s favour. Explaining the idea behind the “China+1 strategy”, Sitharaman noted that it encourages global companies to reduce their heavy dependence on China by investing in at least one additional country. The concept emerged around 2013, when businesses began looking for alternatives due to over-concentration in China. Countries like India, Vietnam, Thailand and Indonesia have since emerged as preferred destinations under this approach. Speaking to HT, Sitharaman linked the strategy to current economic trends, including capital inflows and currency movement. She said that while some investors exited after booking profits, fresh investments slowed due to global uncertainty. However, she expressed optimism after the trade deal, saying, “But after last night’s conversation, I think things will change. You will see the China+1 strategy play out fully now.” 'China+1 strategy’ set to gain momentum after India-US trade deal: Sitharaman Finance Minister Nirmala Sitharaman said the newly signed India-US trade deal will help the “China+1 strategy” take full shape. The agreement reduces US tariffs on Indian goods to 18% and ends months of tense trade talks, giving Indian exporters a much-needed boost in the global market. Welcoming the move, Sitharaman said the deal puts Indian exporters in a stronger position compared to their global rivals. “It is a very welcome move and will be a big relief to our exporters,” she said, expressing confidence that the agreement will attract more global investments to India. The “China+1 strategy” focuses on reducing global dependence on China by encouraging companies to invest in at least one other country. The idea gained attention around 2013 due to over-reliance on Chinese manufacturing. India, along with countries like Vietnam and Thailand, has emerged as a key alternative for global businesses. Linking the strategy to capital flows, Sitharaman said investor confidence could improve after the deal. She noted that some funds had exited earlier, but the situation may now change. “But after last night’s conversation, I think things will change. You will see the China+1 strategy play out fully now.”