NEW DELHI, July 19 (Portal) – India has a chance to benefit from efforts by global companies to build factories outside of China, the incoming World Bank president said on Wednesday, as companies look to diversify their supply chains.
His comments follow recent investment announcements by US firms, including chipmaker Micron Technology, in India and come at a time when the United States is looking for a strong counterweight with China in Asia amid rising tensions in ties.
In recent years, many companies have adopted a “China Plus One” strategy to establish new manufacturing facilities outside of the People’s Republic.
India has a window of three to five years to seize this opportunity and attract investment, said Ajay Banga, the former CEO of Mastercard who became head of the World Bank last month.
“I think India’s opportunity right now is to capitalize on the ‘China plus one’ opportunity. This opportunity will not last for ten years,” Banga told reporters in New Delhi during his first official visit to the country.
Indian Prime Minister Narendra Modi made his first state visit to the United States last month, coinciding with a spate of investment announcements by American companies in India.
Banga said India’s growth has been cushioned by domestic consumption in the face of a global slowdown.
He also met India’s Finance Minister Nirmala Sitharaman and spoke about the G20 bloc, of which India currently holds the presidency.
“There is a greater downside risk of a slowdown in the global economy early next year,” he said after the meeting.
The World Bank chief also called for private capital investment to support global efforts to finance renewable energy. The lender estimates that $1 trillion of green energy transitions will be needed in developing countries by 2030 to help achieve net-zero goals.
“The fact remains that we need different forms of concessional capital. We will also need different forms of multilateral bank capital, as well as government and philanthropy capital, to take initial risk positions or to help enforce blending,” Banga said.
Reporting by Nikunj Ohri; writing by Shivam Patel; Edited by Sharon Singleton, William Maclean
Our standards: The Thomson Portal Trust Principles.