NEW DELHI (Reuters) – India has an opportunity to benefit from global companies’ efforts to build factories outside China, the new head of the World Bank said on Wednesday as companies seek to diversify their supply chains.
His comments follow recent investment announcements by US companies, including chip maker Micron Technology, in India and come as the US looks for a powerful counterweight to China in Asia amid rising tensions in relations.
In recent years, many companies have adopted the “China Plus One” strategy of building new manufacturing units outside the People’s Republic of China.
India has a window of three to five years to seize this opportunity to attract investment, said Ajay Banga, a former MasterCard CEO who became president of the World Bank last month.
“I think the opportunity for India right now is to take advantage of the ‘China plus one’ opportunity. This opportunity will not remain open for 10 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 US last month, which coincided with a flurry of investment announcements by US companies in India.
Banga said India’s growth had been moderated by domestic consumption in the face of the global slowdown.
He also met Indian Finance Minister Nirmala Sitharaman and talked about the G20 bloc, which India currently holds the presidency.
“There are more downside risks in terms of a slowdown in the global economy in the early part of next year,” he said after the meeting.
The World Bank president also called for private capital investment to support global efforts to finance renewable energy. The lender estimates that $1 trillion will be needed by 2030 in developing countries for a green energy transition to help achieve net zero goals.
“The facts remain that we will need different forms of concessional capital. We will also need different forms of multilateral banking capital, government capital and philanthropic capital to take first risk positions or help enable blended finance,” Banga said.
Reporting from Nikong Ori. Written by Shivam Patel; Editing by Sharon Singleton and William Maclean
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