Strategy

China+1 in 2025: why importers are quietly building an India base

“China+1” stopped being a slide in a strategy deck and became a purchase order. Here is what is actually driving the shift to India in 2025 — and how to move without trading one set of risks for another.

The shift is structural, not seasonal

Rising labour costs, tariff exposure and a decade of concentration risk have made a single-country supply base a boardroom liability. Buyers are no longer asking whether to diversify — they are asking where. India has emerged as the clearest answer: a deep manufacturing base, a young workforce, government export incentives, and free-trade agreements that lower duty drag.

Where India genuinely wins

India is not a like-for-like copy of China, and pretending otherwise is how buyers get burned. India wins decisively on:

• Craft-led categories — home textiles, rugs, apparel, décor, furniture and jewellery, where hand-work and design still matter.
• Flexible, smaller MOQs — because production is spread across many specialist units rather than a few mega-factories.
• Cost trajectory — stable and competitive while China's climbs.
• Trade access — FTAs with ASEAN, Japan and Australia, plus export incentive schemes.

China still leads on ultra-high-volume electronics and mature, vertically-integrated supply chains. The smartest 2025 strategy is not China or India — it is China+India, with India owning the categories above.

The trap most first movers fall into

The failure mode is almost never the factory. It is the management gap between your purchase order and your shelf: the wrong supplier wins on price and goes silent, the bulk drifts from the approved sample, and a cheap FOB quietly doubles into an expensive landed cost. On an un-managed India order, 20–30% of margin can leak before goods ever ship — and none of it shows up on an invoice.

How to start without the risk

Start with one pilot order in a category India is strong in. Verify the factory before you pay it, lock a golden sample, inspect before shipment, and keep one person accountable end-to-end. Prove the model on a small order, measure the landed cost, then scale. That is exactly the operating system we install for buyers — so the first order de-risks the next ten.

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